Australians remain exposed to the world's global credit markets,
to the tune of roughly 60% of GDP. That is not Govt debt, Costello
paid that off, but mostly private debt, to finance buying some of
the world's most expensive houses.

The last interest rate rise created uproar, yet in historic terms,
our present interest rates are by no means high. I was a victim
of 18% interest rates in the early 90s, it taught me many lessons.

Our present problem is thus not interest rates, but sheer volumes of
debt. Many younger ones have never known hard times, they might yet
get a shock.

We face a couple of potential scenarios. If things became crook in
China, commodity prices would drop, our economy would struggle.

More likely, China now produces more cars then the USA, they mostly use
petrol etc. Copper is already at market highs, so is
cotton. Wheat is rising due to floods, droughts around the globe.
Should the US and Europe start burning more oil, along with Asia,
oil could easily go to 200$ a barrel in the future. Inflation would
set in, leaving the RBA no choice but to dramatically increase
interest rates, to curb inflation.

There will be many tears, yet that is what the economic tea leaves
are predicting.

How will you cope, if interest rates jump by 2-3%?

Yabby pinches out butts and asks:

How will you cope, if interest rates jump by 2-3%?

SIMPLE...BUY GOLLLLLLLD :)

(Beck recommends that.. 1800-goldline..(hushed tones) *Thankyou Goldline*)

Looking at the all time high price yesterday....the strategy has merit.

Other than that...(puts on 'Prophet' hat) I hereby predict the Economic future.

1/ Eventually, we will either run out of stuff in the ground..OR..some other less developed country will find the same minerals in huge quantities and sell it cheap to our customers.

2/ This will expose our vulnerable underbelly of over-reliance on the Mining sector to generate original money income to our nation.
-That will suddenly expose our "no..we must not have tarrifs" policy of destroying our manufacturing sector for the sham that it is, and we won't be able to afford even Chinese stuff. (but hey..we might be able to 'just' afford a loaf of bread from time to time, and hey..that dripping looks pretty good now)

3/ Massive unemployement..social unrest... descent into tribalism and 'me first' (me, my tribe/community/race) MultiCulturalism= 'Divide and Rule'

4/ The Socialist Alternative and Marxists Unions will be out on the streets agitating for 'workers rights'....many working people will, in desperation, join them.

5/ The Revolution will arrive..and we will be slaves of the new Socialist Utopia :)

*THERE*..don't say I didn't warn you.

Yabby an interesting thread, and one that deserves a look at.
Probably not helped by the lost nature of your first poster after you.
Indeed this can not go on.
We will feel much pain and only time separates us from it.
Uncharitable, even unchristian to blame workers/unions/socialists, for our coming problems.
I seem to remember the very rich, along with greed bought us to this.
How will I be? long ago, after falling for spending what I did not have, more importantly what I did not need, I found my answer.
I got out off debt out off wast and pay cash, live well spend well am far from rich.
Far even from well off, but I owe no man anything, higher interests will put more in my super pension fund.
I did not spend my golden handshake,I can see some who do not being happy about it in a few years.
AGiR.
Mate only telling my view of truth, you seem to be far from a Christian, while I am proud not to be,I would not judge conservatives the way you judge and even defame left of center, me in fact.

the bankers went bankrupt..[despite having/holding an eclusive franchise on fiat money]...*legal tender...

made value
by govt..fiat[decree]...

then govt got sukkerd
thus the poor got sukkered

the banks are bust...have been bust since the 80.s
its only cause they control the fed..their scam has remained hidden

anyhow..govt bailouts of the bankers..is legally called odious debt
[its not obligatory on the people to pay it back...[in fact to pay it back with intrest is doubly absurd

see all money..is made by borrowing..it at ursury
but the ursury...wasnt ever made..it to had to be borrowed

so bankers began giving easy credit to people who could never repay
any fool with a credit card..thus the capitalists get the capital..to repay..their debt...

this bying of gold is ok for yankies
who's value of their yankie dollar is going to fall big time..thanks to quantitive easing[pumping yet more fiat dollars out there..AT INTREST]..interst that can only come from some other mug defaulting..their obligations..

the cure is to let the bankers fail
let those who lent to these bwankers cop the default

then for govt to seize back the fede...and keep the banks going..for the sake of the savers..[who allways loose..their savings..everytime the bankers run this same scam]

ofr course ursury is the real evil
[thats the odious debt]

make sure that every debitor..repays..every penny of their debt
[no cents on the dollar settlement..]

jesus wearned you lot about this
read about him driving out the money-changers

bah whats the use

go buy ya big screen tv on credit..
if its cost dont send ya bankrupt...or its intrest rate]
thenm the power bills will...we are all too greedy...greed is not god

Interesting question, Yabby, but I don't think that interest rates themselves are particularly key to our economic future.

We have over the years failed to develop any alternative industry to that of growing stuff, shearing stuff, or digging stuff out of the ground. The only thing we will have left is a vast playground in which other, richer countries can enjoy some R&R.

We have no inalienable right to prosperity. It needs to be earned, from day you day, year to year and century to century. The world changed for previously world-leading economies - India, China, Spain, Greece, Rome - and will change again.

Ah, Boaz. One question for you.

>>How will you cope, if interest rates jump by 2-3%? SIMPLE...BUY GOLLLLLLLD :)<<

How will that protect you from paying interest?

Actually, make that two questions.

Why pick on gold?

What is it about this particular metal that sets it apart from other minerals that you dig out of the ground?

Especially when, as you yourself point out...

>>Eventually, we will either run out of stuff in the ground..OR..some other less developed country will find the same minerals in huge quantities<<

After all, it is a finite resource, just like all the others.

And what do you think will happen to the price of gold if everybody suddenly decided to use it to "back" their currency? Take a pencil and paper, and work out how you would go about buying a loaf of bread, in 12 months time.

It won't be a pretty picture.

Yabby:

Possibly this would encourage people to sell up in the big cities, pay off their mortgages and move to rural areas where properties and cost of living is cheaper. Unfortunately, due to certain professions and specialty of trade some people don't have that choice. But that problem existed in the US - when people lost their income from the aerospace industry and had to re-invent themselves in order to survive. Migrants after the second world war who were doctors, lawyers, professors, became laborers, mechanics, brick-layers, to survive in a new country. An economic inversion may be good for the country it would revitalise the regional and rural Australia - because at the moment people are preferring to live in the cities.