We have not yet escaped the GFC.
We have done well but the rest of the world owes more that it is worth.
Australia's weak link seems to be housing.
We pay more than most for far less.
A country town home selling for less than $300.000 would sell for nothing less than $700.000 in Sydney.
And investors get in to very big debt to own two or three such homes.
Yesterday a story appeared in the press, workers in Gladstone Queensland are living in tents.
AS rentals are a thousand dollars to twelve hundred a week.
Just a light tilt in our economy, bought about by the worlds GFC may well/will start an avalanche of defaults.
I think we must watch the housing market greed is only good while it works in the favor of the greedy, it can not forever do that.

rentals are a thousand dollars to twelve hundred a week.
Belly,
Right again. Where I live & work the Governments in their infinite wisdom are paying up to $1600.-/week for Public servant housing. It got so bad that a whole council shifted their offices a thousand kilometres to escape the huge rental costs or so they tell us. They're now flying people in-out weekly at even greater cost & increased inefficiency.
You see the Goss, Beatty & Bligh Govts (Qld) have sold all departmental housing & as soon as the deals were singled rented the premises back at inflated cost. The tactic was to relieve the Govt of responsibility. Would you believe there are still people who say Labor is doing a good job. Where do such morons live & what do they do for a living ? Probably retired on handsome taxpayer funded super.

http://www.torresnews.com.au/index.php?option=com_content&view=article&id=1819:land-rent-rises-400-per-cent&catid=3:news

Belly,
fyi

Sorry to make this political, but this problem has been brought about by the lack of confidence, by both every day people and business owners and leaders alike.

we have been in poor shape for years.

Just now we are starting to see the data being released to back this up, unemployment starting to rise, many sectors starting to buckel, and many already dead in the water.

Yet, this government still insists we are in great shape. Why?
When are they going to admit they have repeatidly failed to manage our economy and that, if not for the mining boom, we as a nation would be dead in the water.

Worse still, we have nothing left to fight with, thanks to their irrisponsible waste and missmanagement.

And you lot support them.

At a time when we should be litterally printing money, we are borrowing 100 million a day just to service debt, debt that was not there less than four years ago.

You were all warned, many times over by those who know, employers, job creators, yet you just could not bring yourselves to accept that your government was totally incompitent.

Its a disgrace, and one that will haunt your lot for years to come.

Thanks!

Those two posts gentle men are uninformed, no government, state or federal can be blamed for this.
A problem from the 1970,s it now is a bubble.
And it will burst, in an Australian movie from the 70,s we saw a little piece of real life.
Young couple living in a caravan, about 5 years in to a marriage, bought their first home.
They clearly could not afford it, so? they filled it with white goods and such on the never never, credit.
Today, as our population grows, as it always has been speculators and investors compete with first home buyers and the upwardly mobile.
Before the GFC we, some, spent far too much , on credit and prices driven by MARKET FORCES not the every shade of governments went too high.
We have a better banking system/lending than America, safe guards than them too.
But we paid/borrowed much more for homes too.
The only possible blame for high rentals that can be put on government is we no longer build as much low income housing.
Do we blokes spend tax payers cash, that pocket is not deep, on getting involved in the market enought to drop those rents? billions of dollars?
Our spending habits have changed we bank more spend less, but still owe more.
And the banking we know has retailers concerned.
How much more concerned if we see 2% rise in unemployment or rise it rates.
Our housing bubble is going to hurt.

A problem from the 1970,s it now is a bubble.
Belly,
right again, 1972-75 to be precise.

Governments are driving up the costs, as simple as that. They're the one who increase all charges which then have to be passed on down the line. The moment some outfit does well the Govt & Labor in particular, pounces onto them & hits them with increased charges.
It is this money grab with prevents us from getting ahead & making progress. Loosen up Govt & you'll have the benefit of a good country.

Well it depends on which way you look at it. It was a lack of regulation in the financial markets in the U.S. (in particular) that led to the 2008 GFC. If you take a peek at the present situation with the Dow and European markets, you'll note that exactly the same gyrations are happening again. The same volatility where on a weekly basis the markets take a dive for a few days before rebounding....make no mistake, this is precisely what occurred before the 2008 crisis.

And we've learned nothing! People are still encouraged to turn to credit to get what they want - unending growth is still the mantra, blah, blah. blah....

Interestingly, the Euro is at risk in this latest round of unrest, with quite a few market gurus predicting its demise. Stay tuned folks - it's not over yet.

Rudd, in all his ill advised wisdom, decided it would be a good thing to increase the first home owners grant to 21K as yet aother failed ploy to stimulate te economy.

So, here we are some tree years latter, and many of these victims are once again fighting off bankrupsy, the difference being they now owe S- loads.

Irrisponsible fools ( government) and their loyal followers have a lot to be ashamed about for many years/generations to come.

The biggest mistake they made, if we can choose one of the many, was to make employing people harder during the toughest times in decades.

But, you were all warned.

*And we've learned nothing!*

Actually not so, Poirot, if you look at the stats, Australians
are actually saving more then for a long long time, something like
10% of income, up from 1% or so.

So people have learned something and are trying to pay down their
debts, much to the disgust of Gerry Harvey and other retailers.

The 2008 was indeed a problem of some in the financial markets
cutting loose, after Bush removed financial regulations. Sheesh,
if we removed police from the streets, no doubt the crime rate
would rise too.

The present debacle is in fact much greater, as for years Govts have
simply solved their fiscal problems by ever more debts, year after
year. Luckily for us, we had Costello for years, who took us in the
opposite direction.

The point has come where European Govts in particular owe so much,
that markets started to question their ability to service or repay
these debts. European banks are the ones who have been doing the
lending, but the sums are so huge, that if countries like Greece
should default, they will drag large parts of the European banking
system down with them.

IMHO they will possibly try and print their way out of the mess,
which is why gold is at such a high price.

So the problem really is a political one, reflected in economics and
not the other way around.

The GFC is still around and I don't believe will ever see pre 2006
times again. The housing bubble must burst or collapse, it just seems
to be waiting for something to prick it.

Consider this; the world, everywhere except China & India, is having
problems with growth. China's growth rate is around 9 or 10 %.
That means China's economy will double in 7 years !
Do you really believe that there are enough energy & other resources
available in the world to enable that to happen ?

This implies that China will either have a crash or steep slide to
what maybe a fairly severe landing. What will happen to our economy if
China reduces its iron ore and coal purchases to say 20% of current ?
China has been developing its own mines in Africa, they could chop us
out altogether.

"Western" economies are suffering low growth problems.
The reason is that oil & coal prices have eaten up most of the GDP
that otherwise would have been available. Oil has settled at around
$115 for Brent and $120 for Tapis which we buy.
Interest and principal is repaid from the GDP and that points up why
European banks are in so much trouble.
It shows why businesses here are having such a difficult time and the
general public is paying so much for electricity etc.
The lack of GDP echoes through the whole economy.

I agree with Poirot the GFC is not over, we head for great pain great change.
But here in our country we as a nation have far less debt,BUT private debt while being paid down,housing debt, is not under control.
The wise grand parents who told us of the dangers of credit, then the understanding we could buy a home or car faster by using it, has blinded us.
First lets look, do we want 10% or 20% living in tents?
Do we want Socialism then.
Is that fair, or is the the American banking system again? privatize the profits Socialize the debt?
Is a government intrusion big enough to reduce rentals good?
It would stop investors/building/speculation would it not less homes .
I do think we are in a mess, but it will get far worse.
Will we become like America? still the richest country in the world, but with so many street people.
Those ww1 and before workmen's cottages in Paddington and redfern Sydney, too small to swing a cat in, once slums, sell for over a million dollars!
Yet we could, out side the city's [cheaper land] build them today for little, some surely need help but every one?
We ask too much from governments blame them for too much then degrade the people running them because the tax bin is not endless .
Who after a financial crash will say we did not need two cars the big TV and lifestyle on top of house payments? few.
But those in trouble may be many.

one of he biggest problems with debt, is the fact that home owners can access equity, to easily and spend it on rubbish.

A wise system would have been to either prevent this buy. car or holiday and put it on the homeloan, or, at the very least charge higher rates for this facility.

We all know that the growth experienced from 2000 to 06 was unsustainable, yet, lenders stll lent on the value even though nobody really knew what the real value of their home was.

One should never be allowed to secure depriciating assetts ( toys) against bricks and mortar.

Another idear would be to allow home owners to reduce debt on thier place of residence up to 10% annually with before tax dollars, but only if they dont hold an investment property, or have a line of credit on thei home.

Investors, such as myself get to many breaks in my view, while home buyers dont get enough breaks.

But, you cant fix one problem without plugging the holes first.

Rechtub while it is true, some get in to far too much debt.
What do you want who to do to stop it?
At least our laws are better than Americas, we have bankruptcy laws and if you have the money you must repay it, or as much as you can.
Americans walked away free, from homes they lost.
So who controls the unwise, not government intervention surely.
Banks and lenders while the assets are appreciating will lend.
IF/WHEN the crash comes it will be many headed.
Home owners will fail banks/lenders at first struggle after maybe fail.
Speculators /investors next.
Then? a landslide.
Shortage of houses multiplied by profits in investing in them drive the markets.
But remove one stone and watch the slide.
Government intervenes must be well thought out before any is taken.
After all any intervention will have affects.
Do we make our own government cars to cut the prices.
Would we /should we re enter the airline market to save on air fares.

Question:
Saw an item on the BBC a few minutes ago.
Three US people had been unemployed for some time.
One woman said she lost her job, and has spent all her savings and the
time of the dole has run out and it has ended.
She has no money and no income.
She said she cannot pay the rent or buy food.

How are people supposed to survive there ?
They have food stamps which I believe you take to supermarkets and get
food. I saw something that said 1/3 of US people are food stamp dependant.
Doesn't sound too good.

No interest, no deposit, no repayments, nothing to pay until 2015!

*25% backdated interest accrues after one missed repayment.

Freedom of choice, is what we got! Freedom from choice, is what we want!

The world is stacked against the stupid.

Only stupid people are breeding.

Happiness is just a chemical.

Anyone seen that movie Idiocracy?

picked the wrong time to be looking up at the night
popular belief came down,
destroyed his house and claimed his sight
forwards in lockstop barely able to draw breath
yeah curiosity killed the cat,
he's buried alongside every great mind we never had
i'm sorry i know it's only rock and roll
but i've felt this twinge in the back of my mind
you do not have a monopoly on the truth
believe everything you read
and in twenty years we'll put you behind glass
for all the people to come see
they'll be rolling in the aisles
whatever you want
whatever it is you haven't got
sentimental
knowing when you get on that road
i've got no idea where you're going
ooh..
before you jump you better think twice
no angel's gonna appear to offer you advice
whatever you want
whatever appeals to whatever it is you haven't got
sentimental
knowing
sentimental
knowing when you get on that road
i've got no idea where you're going

belly i have long thought that it is better to reward people for effort rather than just punish them for bad.

as an example, just imagine if you were an A rated driver, without an infingement for say two years. Then, as a reward you would receive a discount card that would give you a discount when you pirchase petrol.

So, if you reward people for reducing debt, then they are less likely to borrow for meaningless items, using the equity in their homes.

A car purchased for say 40 K, when th money is added to thei homeloan, the real price of that car can be double what thy paid, furthermore, with a car loan, at least they ar reducing debt, as with a line of credit, they need only service the debt which allows them to go further into debt.

A higher interest rate for non approved purchases would also be a good move.

Bazz good morning, spend some time researching that subject.
It has always been so in America, they invented the free food lines.
And mate, be aware, like it or not our system, never change it, has been in part Socialism, by demand!
Of both sides of our politics.
Hoully , you seem to be enjoying what ever it is, no arguments from me but any answers from you?
Rechtub.
I do not want to offend you, you flip flop.
From an anti worker to Socialism for small business, to low tax, I just can not follow.
And mate I can not under stand just what you want to do about the coming explosion of the housing Bubble.
Lets separate rentals, government can influence rebuttal property's, actually should.
But not by saying the answer to every issue is spending our money.
TAX lets give further tax breaks for fair rental owners low income rental owners so it pays THEM to build more.
Back to home owners/investors/speculators.
Yes even international investors buy our homes for investment.
Instead of shares or other investments.
Should we intervene? drop the prices by becoming a government investor.
Well maybe but with thought and planning.
Make building of smaller cheaper homes worth while, but do not put tax payers funds at risk.
The country must not suffer more than it has to in this growing threat.

Belly, you say i flip flop.

It may well appear so, but i have two points of view. The one tha effects me pesonally and the one that is for the good of the country as a whole. This is why i m a true swinin voter.

Now heres a tip for your lot.

Step aside and allow rudd back in and watch the polls change as quick as th wind.

Question is, can she, or her backers see the forrest for the trees.

As i have said before my two favourite PMs have been bob hawk. and john howard.

Change the leader and get rid of unworkable IR laws ans i may just swing that way.

Belly & Rehctub;
You are both right in parts of your posts.
Belly said; Before the GFC we, some, spent far too much , on credit and prices
Rehctub said; we are borrowing 100 million a day just to service debt

All very true, but at the same time it would not have mattered which
pollies had hold of the levers.
There have been economists and oil field engineers and oil industry
financiers who have been yelling their warnings for years but no one
listened to what they were being told.
What is happening now is exactly what they warned of from back in the 1990s.

People do not like to face problems that mean we will all have to
make very significant changes in our life style.
As one US pollie said
"The American way of life is not up for negotiation"

Well he was told that geology does not negotiate.
Similarly our politicians are of the same mind set and just cannot
comprehend what is happening.
They have been told, but they cannot see how to deal with it and at
the same time promise bread and circuses.
As a result they prefer not to know.

Bazz,
Chameleons playing ostrich.

Dear Belly,

According to reports in the Fiancial Review - this weeks
National Accounts show that the Australian economy grew
strongly in the June Quarter underpinned by a recovery
from the national disasters, solid growth in consumption and
a further pick-up in business investment.

GDP rose 1.2 per cent in the quarter to be 1.4 per cent
higher through the year - an impressive result in the
context of an uncertain global economy and the patchwork
pressures that some sectors are facing at home.

These figures are a clear demonstation of the underlying
strength and resilience of our economy which continues to
be a stand our performer despite the worst natural disasters
in living memory.

This week's results confirm that the economy has
rebounded strongly from summer's floods, and cyclones, with
exports starting to recover and inventories being rebuilt.

The government must be doing things right in its steady
economic management which has seen the Australian economy
emerge as one of the best performers in the world.

Hopefully they will not be deterred and will continue to
methodically implement their ambitious reform agenda, so
they can keep the economy strong and convert their success
into lasting gains for us all.

One of these areas, as I've stated previously is - their
plans for a world class school education system. They're
attempting to fix years of education neglect and underfunding
left to them by the previous Liberal government.

That's why they oppose Tony Abbott's plan to cut $2.8 billion
from education and abandon Labor's computers in schools and
trade-training centres programme.

Yes, Belly, the GFC is still here - but thanks to our
government - we're doing fine.

Belly & Rehcub,
Read Lexi's last post and you will see what I meant.
This the attitude of politicians generally. The cornucopias are in
full flight and think technology and the market will save us all, amen.

It appears that Lexi is one of those like the pollies who don't want to
know and to quote Jo "Now don't you worry".

There is no replacement anywhere near likely that will enable
industrial agriculture to continue. This is the answer for politicians
for why food is increasing in cost. This is the first area that they
need to tackle to mitigate the coming decline.

Lexi mentioned education, the whole curriculum will need to be
revamped as we will not need stacks of MBAs and arts degrees what we
will need is an increase in farmers if we want to feed the population.

Globalisation was not a permanent institution but a transient state
due to the low cost of oil. This is ending and we will need to rebuild
our manufacturing to cope with the needs of the people.
By needs I don't mean stacks of 50 inch flat screens but furniture,
sewing machines, cooking utentils.
We will need railway builders, not motorway builders.

Years ago almost all girls learnt to knit. There is something the
schools could get started on at minimal cost, for there will be less
money for schools as well as everything else.

Remember your grandmother' kitchen ?
That will be a good starting place.

Here is another idea for those "clever" politicians;
Change those horse breeding properties up at Scone over from breeding
racehorses to draft horses. It will take many years to breed up the
number that will be needed.
Does anyone think pollies have that much foresight ?
The schools, especially in the country could start training the boys
to handle such horses.

Oh Lexi it is not sexist, its just that such horses need to be handled
by physically strong men.

Dear Bazz,

At least this government is actually doing something.
I gave education merely as one example. After years
of neglect and underfunding by the previous Liberal
government its great to see something actually being
done to rectify the situation. It's not some sort
of "fantasy," or "cornocopia," as you put it. The reality
is - something is being done for a change. Let me be more
specific: The government will be delivering -

New or rebuilt facilities at 9,500 schools Australia wide.

Over 5000 new school buildings

More than 4000 new classrooms. More that 2,500 school
libraries. Nearly 2,500 School Halls. More than 1,500 sports
grounds and facilities. 250 new science centres.

And this is why they've nearly doubled the national schools
budget to a record 65.6 billion in over 4 years.

The government is investing 2.4 billion in the Digital Education
Revolution - delivering computers to schools by the end of
2011. And 2.5 billion for the Trade Training Centres in Schools.

They're building and re-building Australian schools. They're
building and re-building Australia's educational opportunity.
But even more importantly - they're investing in this country's
future - OUR CHILDREN. And that should matter to us all.

Hi
I think Australia's problems are going to get worse because our growing population.And with all potential problems with coal seam gas.

That is all very worthwhile Lexi, but their project management skills
leave much to be desired, so you have to worry about the cost and are
they targeted properly.

Are the schools teaching for the future or the globalisation world ?
How many high schools are teaching botany, soil physics etc in other
than agricultural high schools ?

Those two subjects are just two off the top of my head, there must be
many more skills that will be needed to make our communities survivable over the next 50 years.
Our cities are going to change and quite different skill sets will be
required than we use now. The throw away society will end and he or
she who can fix appliances etc will be in big demand.

If we can keep the electricity generation going as it is now then
the economy will be quite manageable as we will still have public
transport and power for manufacturing
Unfortunately that is not guaranteed due to the depletion
of oil that will have occurred by 2030, and the effect of systemic
collapse in complex economies.

This where the politicians are failing us, they should be worrying
about this problem which has much greater effect than AGW and fossil
fuel use will be falling faster than any CO2 reduction scheme yet devised.

Dear Bazz,

That's why the government is investing in Trade
and Training Centres. The overall programme has
been carefully assessed and it's merely a start.
Nevertheless a good start. And You have to start
somewhere, as with everything. Better than neglecting
and underfunding or simply cutting back on things.

Lexi,
new schools yeah. In my electorate the Bligh mob's building a school with football oval & basket ball court on an island with about 100 kids. Money well spent. Why are they keeping this so quiet & out of sight of the media ? I'd have thought so close to the state election they'd be bragging about their "achievements".
Anyhow, Why all this education waffle all the time ? Education has served only those who can exploit those educated to a mindless state. Why is it that with so many educated we can't find people to enter trades ? Education for education's sake is pointless & costs us dearly in the long run as we're finding out now. I have yet to see a lawyer or some other academic to fix a flat tyre etc. You see, education does not translate into ability. It instead puts the inept onto pedestals from which they can't look down because the height makes them dizzy & renders them useless as well.

individual,

"Education" translates into another nicely oiled cog in the consumption and endless growth machine...

Dear Individual,

Education covers a very wide area beginning with schools,
onto trade and training centres - onto TAFE colleges,
and only finally ending with universities. And young people
are entering trades. My nephew has chosen carpentry as his
trade - and he was inspired by courses he did at school
and found that he loved it. Now he's working full time, while
continuing with studies in his chosen field. BTW - we all
know that you get your skills from on the job training - but
you get more opportunities - if you show enough of an interest
to be actually studying for something. It's the price our
society puts on your having a credential. Would you trust an
unqualified electrician?

*"Education" translates into another nicely oiled cog in the consumption and endless growth machine...*

I just blame all you females and your endless shopping gene.

If you girls just dished out the sex more like bonobo females,
without all the commitment and endless demand for money,
blokes could put their feet up, enjoy the moment and not worry
about growth....:)

Education covers a very wide area ,
Lexi,
that's why I said education for education's sake is pointless.

Lexi, everything the government does is missaimed.
Else why would the local Tafe have closed its electrical trades course ?
The closing of manufacturing is one cause, lack of govt interest is
the other. They are still talking about globalisation and growth.
They still do not realise growth is ending.
This is not temporary, it is permanent !

A local two way radio company cannot get staff or trainees.
As the owner said to me all they want to do is play computers and games.
He has a couple of retired techs that are radio amateurs working for him.
Both are in their 70s.
He knows why, it is too hard a work and requires a real determination.

It is going to take a couple of posts to get this in.
First while reporting it in another thread returning from my trip I heard the following.
ABC Radio National Australian journalist Chris? claiming we are biased and not Representative, all on line blogs and such.
No maybe partly, but I think we too mirror the country.
Look what has politics got to do with this?
If we must, only the truly uninformed do not know/understand, we are going well.
The GFC is here this day, and ELEPHANT in our kitchen sink!
No matter how well we are ruled, how good we handle our economy, we are going to see the beast break wind.
Greece has spent, along with Italy Spain England America too much.
The Euro is about to die!
Folks Capitalism, the glue, only glue holding humanity together is in danger.
Only great reforms, we will get them but they will come only after suffering,will save us/it.
Continued

Stay with me all will be explained.
I left my home bought in 2002 early Saturday.
It built in 1970 was once a Sydney executive house, then doctors surgery and such.
5 bedrooms two bathrooms it was one of 8 transfered by truck rebuilt in my village or close to here.
Well reconstructed but a fibro house I paid less than $100.000 for it.
Village average was 45 to 50thou.
I drove Saturday to my great love a seaside town known for its fishing.
Copy's of my home,2 rooms or 3 and older without the renovations,sold 12 months after my purchase for $600.000
The next two rears saw brand new Mac Mansions invade now more than two hundred of them.
But until two years ago those fibro cottages, purchased and torn down to build a mansion cost a million dollars.
Credit can be great.
It has for too long been misunderstood by too many.
No sexism intended but my fishing did not happen.
I spent my time counseling lifetime Friends who filled house with items on credit and on wifes demands ,went broke.
Living now? in rented flats for too much rent.
We are going to hear much more of the Elephant.

Yes Belly, what you describe is an example of where govt also has gone.
This what I have been trying to get across about growth.
With no growth we can keep things going as they are. Nothing new built
no borrowing, just running to stay still in one place.

If we have growth, that growth can be used to pay for a new project
by either cash or instead borrow and use the growth to pay the#
# No more than 8 posts per article in any given 24 hour period.
loan repayments including interest.

Where people as well as govt has got into trouble is they have
borrowed and spent more than the available growth and when growth
stopped they kept on borrowing and spending.

Growth requires increased energy. That is the simple fundamental.
Since 2006 there has been no increase in available energy.
China and India mainly have been mopping up any extra energy that they
obtained by long term contracts and so other countries have had to go without.
Pakistan for instance has massive blackouts because they cannot
afford the fuel for their power stations.
The US has cut back their oil consumption, until recently by 2 million
barrels a day.
Now you can see why we are paying $124 a barrel for oil.

Our growth is 1.2%, very low and may not pay our interest bills.
It would be coming from mining I think, so the rest of the country
is in contraction, not even zero growth.

Now perhaps when you hear the financial commentators waffling on about
low growth in various economies you might understand what is going on.

Bazz while we ave some things in common our opinions on issues are far apart, some times.
I truly and honestly want you, and Any one, to prove to me this government has got us in to financial trouble.
Given Howard Costello, the mining boom, previous Labor government actions we had money in the bank.
Yes true, Liberal stated policy was to stall our economy.
Put fiscal responsibility first.
That meant recession near depression, it meant great pain and unemployment.
It meant No pension rises no school building no new hospitals.
FAR more it may have saw depression, once stalled economys take a lot to restart.
Right now, today, we AUSTRALIA, are so little in debt compared to other developed country's the claim we are in trouble is.
Uniformed or blind, or biased lies.
We do not face the horrific ENGLISH belt tightening, I admire the cuts a conservative government is showing there.
And under stand the pain lower income [it is always so] carry to get that economy back in the black.
It Bazz is True, Capitalism, our only life boat, must continue to grow.
If you got your wish, if progress stopped, truth is the Ponzie scheme we live in would collapse over night.

http://www.telegraph.co.uk/finance/financialcrisis/8720479/Debt-crisis-live.html
Link is one of hundreds I could of posted here.
Why?
Well afraid I who owe no man one single cent, and own everything I need, am convinced we must look at the financial state of the world.
Christians, all religions see us as passengers on an ocean liner, and God at the wheel.
Australians of my generation will say she,ll be right mate!
Will it.
We like to say how bad things are here in our country.
And even I can see a recently elected state government taking action to put it back in the black, harsh action .
But what is the right action.
How do we, should we, control personal debt.
Would that be enough? to turn the worlds economy around?
I look and shake my head,at complaints the problem is workers wages.
That opinion never includes such as the multi million dollar bonuses the head of Quantas got for? cutting costs/sacking workers.
In the some country villages /towns around me, wages only keeps the shop doors open.
And for how long.
Our housing bubble grows, today investors may become millionaires , but tomorrow? a black cloud is above.

Belly, like it not, wages are the cause of high living costs and highh debt levels.

You see in todays world people are no longer expected to work long hours fr big money, they simly exect to be paid well, skilled or not, and this has made us uncompetetive in the global market, and it is this globa market that holds the key to our future.

Look around you today and a vast amount of the jobs out there ar either gvernment funded, or, even worse, fixing government stuff ups.

Now most of the wage increases are as a result of the mining boom you know, who hasnt heard the ol' i know a bloke on three gand a week driving a truck at th mines.

So, with most small businesses doing it tough, some down by as much as 80%, having to fund wage increases just because th masses are doinng it tough, has not gone down to well, especially since many owners earn less and work more.

Most o f my mates in business say they hate it and would quit at a heart beat.

This qantas thing is yet another example of staff not accepting time are tough and may well com back o bite them.

Now how you can sit there and say this government has not contributed to our situation defies beliefe.

But then you also accuse me of being ill informed but you coldnt be furtherbfrom the truth.

Rechtub! lets you and I try one last time.
Its as simple as the chicken and the egg.
If you let it be.
If just say wages this very day all of them saw an across the board cut 10%.
Your first thought? bet you think ah! at last my profits will rise.
Would custom drop? even by only 5%?
Is it just possible, just a chance, housing costs take so much of our pay now we have less to spend on food/cars/holidays?
Now lets get away from your City shops.
Out in the country now our town,for this debate has 15.000 people.
We are mostly living in isolation from big city's.
the wage cut? any chance 10% of the money spent here stops? maybe 10% of firms /shops fail.
Simplistic and uninformed to place wage costs at the head of a list of reasons for GFC.
GFC was/is about debt, about people without funds buying things they could not pay for.
About cooperate fraud and greed.
Rechtub wages end up in your till.
Meat is a rare treat on my reduced income and lack of free to spend funds not too much money is your problem.

Belly a larger threat to small tows
is factory closures, due mainly to the factory becmming anti competetive.

Now while i accept there are many influences to this problem, wages are a key issue, as the IR laws recognise the time one has worked, rather than the throughput achieved.

What is needed is a basic wage plus productivity allowances as this wll reward the better worker, something that is illigal in most circumstances which often results in the lowest productivity worker settng the bar.

Coupled with unfair dismissal laws the result has been a failure in te new one si ze fits all IR laws. We warned you all but you didnt listen. Perhaps you will once the s mall town jobs ar gone.

Many labor suporters will hold a position simply to be objective.

Belly & Rehctub,
It is true Belly that we are not in as big a mess as many other
countries. However it is more by good luck than good management.
You may have heard this morning about our jump in unemployment.
True it has been offset to some extent by 46,000 new public servants.
However they are an overhead on Aus.com.au.

Just think about the situation when the mining boom stops.
Not if, when !

On the other thread I put up the link to an article about China.

http://tinyurl.com/3e74fvy

Read that and see if you are so confident for the mining industry.
It is not the govt's fault of course, except they have not done
anything about it.
I think I know why they do not seem to understand what is happening.
It would mean tearing up a number of international treaties such as
the WTO and globalisation restarting manufacturing, putting on tarrifs etc.
Ultimately there will be no choice, but by waiting until it is both
obvious and forced upon us we will go through a very bad transition time.

It is moments like these, true, that brings me to ask is it worth while?
Is debate , is discussion , worth while, note I am told I am blind to a truth that does not exist.
Mr say it Again, Paul [how I hated him for that!] Kieting, told us we moved slowly but firmly to wards open world trade, and away from manufacturing industry's.
Take away, NOW! our gains from that world trade.
Put manufacturing along side the jobs world trade has made.
Tell me gentlemen , please, if high wages bought about the GFC, if people do not work long hours why is our mining industry thriving, it like construction works 60 even 80 hour weeks and pays much more.
Fanny Mae and Freddy Mac American house lenders , gave loans to people without income!
If Rechtub you got your wish, I think you would reduce wages by about 20% our economy would fail in a week.
100.000 houses be reposed in a months banks fail .
It may/will one day take place, we long ago, turned credit in to a Ponzie scheme.
Too much spending of money we do not have, using house values as security that are likely to be half of what is owned will bring SOME DOWN.
If enought fall we all do.
One other important thing, you can not walk away from, workers want to leave some industry's, wages are too low, Butchers are better with a stop and go bat in their hands than a knife.

Butchers are better with a stop and go bat in their hands than a knife

And there in lies our problem.

Why bother doing a trade if one can earn better money with minimal skills.

As i have said many times belly, inflated living costs should not be burdoned onto employers.

I truly am sorry mate.
You know my story's about small business men/women calling me in to help are true do you?
Can you understand the product of a persons labour, is just as much a product as rump steak.
Would you sell me your best at less than cost.
Rechtub, the sky is not falling.
We do not have massive unemployment.
If we did Butchers would stay behind the counter, tradesmen keep the tool bag on.
The product they sell is of value to them ,and the employers who activly poach them.
Bright businessmen and women told me this, I have chosen to pay above award to keep my staff.
I/we just get them up to skills and they go!
YOU mate prosper yes you do! on the disposable income of workers.
Who pays for your snags?
Rechtub, shortages of workers in some industry's see,s higher wages as bosses compete for workers.

http://smh.domain.com.au/real-estate-news/homes-are-overpriced-but-how-much-20110914-1k9d9.html
While the thread has lurched away in other directions, ones I am quite willing to follow.
The link gives evidence for my thought we are in a housing bubble.
And the true Crisis may result.
We know the GFC is far from over, at best some sweep it under the rug, but no true way can be found around the monetary Crisis we are yet to control.
By the way, my lurch in another direction.
One day, because we will be told, no other way exists to control investing/banking/money we will slowly but with certainty have one single world wide system/control in money matters.

Belly said:
We know the GFC is far from over, at best some sweep it under the rug,
but no true way can be found around the monetary Crisis we are yet to control.

Here I think is an explanation for why Belly is right.

It seems that there are two peak oil situations developing.
One is Geological Peak Oil and the other is Economic Peak Oil.
The link below is to an article by Chris Skrebowski who is the
publisher of an oil industry magazine.

The argument he presents is that as oil production grows more
expensive developed economies will not be able to afford it.
This will have the same effect as demand equaling supply with
increased prices.
However the marginal costs do not affect developing economies
to the same extent and leads to this quote from the article;

This in turn poses a terrifying question: Would this higher price
tolerance mean developing economies could keep developed economies
in growthless stagnation by paying oil prices that were just above
those that bring developed economies to an economic halt?

To fully understand the above you need to read the article.

http://www.odac-info.org/newsletter/2011/09/16

I think this would mean that our two part economy would continue
with eastern Australia going into permanent depression.
Western Australia would continue until China swapped to their African Mines.

Politician test:
What do you understand to be the difference between economic and geological peak oil ?

Bazz as you are aware I have doubts peak oil will be such a problem.
It, any big rise,will harm us and our economy.
But man can improvise and will.
Self interest in my belief, is all that stops us converting to new fuels sooner.
Of topic but some , more interested in the unrest leaving oil in the ground may bring, war, stand in the way of new fuels.
Economy can not forever let the very rich invest money they do not have and keep the profit.
I understand, to grow living standards we let credit grow too big too fast but it must be paid.
Not enough Gold exists to go back on the Gold standard.
But watch this space.
If my fears come true, in my view when, a plan will be put before us, we will have no choice, and a new world system will control lending even spending.
This world is not running on auto it is a ship at sea and that sea is about to get rough.

Well I understand Belly, many, if not most have difficulty in accepting
what is unacceptable and which will eventually stare them in the face.
It is a very common effect and physiologists have a word for it.
Already many poorer countries are having problems with the price of food.
These are just the early signs, and the lack of growth is starting to
show up as a real problem in many countries, not least Europe.
NSW, Victoria and Sth Aus seem to be in contraction so where did our
growth go ? If it wasn't for WA & QLD we would be the Ireland of the Pacific.
Trouble is that leaves us with major unemployment especially the young.

Bazz while we have not yet met I know you to be a very bright bloke who is owed a good deal by our hobby.
I however very firmly do not agree with your fears on peak oil.
I do fear the GFC, a disturbing beast that could bring us all to our knees at any minute.
You will be aware of ww2 gas bags on cars.
We know using ethanol, once seen as our savior, reduces food.
And we both understand USA and other country's using Corn and grains for fuel is pushing food prices up.
IF we went on a war footing tomorrow put fuel on rations, we could run city fleets on coal fired power via electricity.
At a pinch rail , intercity and state could be converted to electric.
enough fuels could be found to farm.
Bazz, this much is true, long ago international lending/borrowing, the very way we trade has become an impossible Ponzie scheme.
It must change or fall, I think first fall then change to a single system world wide.
Tomorrow, tonight on the other side of the world, a new discovery may be found a new cheap fuel, Mate nothing wrong with my ability to think, not hiding a mental deficiency I believe in matters of existence/profit self interest will save mankind.

When the OECD's International Energy Authority says that oil production
stopped increasing in 2006 and that we are on a bumpy plateau and that
we need to find two more Saudi Arabias by 2020 and then another two
by 2030 then Houston certainly has a problem.

Well Belly we shall have to agree to disagree.

Informed and interested posters have known for some time Greece has no choice it will default.
This will impact, but what if Spain, Portugal or/and Italy do too?
This is what faces those nations, debt over their gross national income.
What interest rates do they pay now?
What will they pay next year.
If an effort to pay those debts off is to be made at what level must the cuts be?
Say ten percent to pay debt and 7 to pay interest?
What will be the resulting slowdown to their economy's?
What ever it is it surely will further impact on the debt crisis.
Now us, if you owe just on your house loan, 6 years total income.
And you now pay 3 5ths of it ,your job gos, or interest rates rise 2 points how do you pay.
Some owe housing/car white goods furniture 15 years income, and still use credit cards!
We can not forever escape the retribution coming to some of us.

Thread has slowed but the problem grows.
We drifted away from debt a in Australia and homes.
But this mornings walk in the printed media cannot be ignored.
At the top end of the housing market Brisbane press talks about a Gold coast mansion not meeting its reserve,and of the vendors crying.
further that prices at that end are down about a third and in some cases that is millions of dollars and not selling.
London news said world monetary fund warns trouble ahead, Australian dollar races back toward parity.
What does it all mean.
Any one doubt it means trouble a head.
Or that the current world financial system is in danger/must change or fail.
Some will be broken forever by the impacts,some made forever.
What gos right down, may take 3 life times to come right back.
But those who buy in cash at the bottom will be made for life.

Last night while we slept shares on Wall Street fell by 5% and 4 and a quarter in the other measure.
On buses or trains this morning on the way to work.
Or like me about to have that second cup of coffee and go into the garden we feel ok.
Our economy is not in trouble not yet.
By this time tomorrow?
If shares fall ten percent overnight.
If China, unable to sell its goods, if wanting to retrieve its loans, closes the door?
I would not this morning want to be owning a personal debt of ten thousand dollars.
But some hold personal debt of half a million!
And the only income? a job that may not be there tomorrow.

http://www.smh.com.au/business/buckle-up-for-apocalypse-dow-20110924-1kqsq.html
This link is too horrible to think of, but we must.
It could of been one from any news paper in the world, it is from one of ours.
Sky news, an unlikely place to find truth, talks of the Australian Dollar falling twenty cents overnight.
We know the world monetary fund say this country can come out ok.
But world wide recession?
Said to be unavoidable?
Who buys then the products of our trading nations,China, India, China, quite Bizarrely in part buy from us for internal growth.
But what if its investments and loans are not safe?
Australians we are told, are banking more , paying off debt, all good and wise.
But in doing contributing to stalled spending and growth.
What of those who are still spending as we all did until 5 years ago?
Some owe for a house two cars the white goods and furniture and credit cards,those cards are even used to pay those loans.
One rolling stone may gather no moss but we are about to see it gather companions.

I have enjoyed the chance to talk about my fears and concerns in this area.
Perhaps that is the reason we come here.
I have not enjoyed the growing concerns I and the community have.
Twenty threads could be started from this world wide concern.
One may be titled its ok go back to sleep.
Another do you think we can extend our loan to buy a new car.
Or more somber what comes after Capitalism.
My first post in that thread would say oblivion!only a system based on self interest or compulsion can work.
My super fund is not very big, not one years past annual income.
So last? a thread about shares or bank seems a flyer.
But my first post in that?
In the right low fees fund, not one that sends your boss on annual free trips? stay with shares the ride will be interesting.

Billions of dollars world wide returned to share owners yesterday.
No not the losses of the last week.
Or the last few months.
Not the losses from the 2008 frightening falls.
Not great new insurance that it will not happen again.
Just a plan, a promise of a plan a hint one may be found .
To?, do the impossible! save Greece, it can not be done, save all those country's who owe more than they, without real effort real pain pay.
Capitalism is built on the purchasing power credit gave us.
Individuals/Nations
That credit had to be built on reason , understanding, it had to be paid.
We all , will pay in some way others bills.
And the biggest part? a system forced on us because of others miss deeds.
After all, money is only paper and metal you can not eat it.
But without it you can not live.