"Thorburn, all Australians should be concerned by the exuberance in housing. But too few are (another sign of market complacency reflective of a peak in social mood)." --Totally agree.
"The Australian govt is following the EZ path towards austerity, starting with its first budget next month. At a time of rising unemployment, slowing growth and falling tax revenues - coupled with an increasingly precarious housing bubble - our govt will cut the budget to the bone in its misguided goal of achieving a surplus in the near future. Their actions will only make the looming recession worse."
--They have to tidy their book. Be prepared to bail our banks out. of course the side effect is that the housing bubble will burst faster. Only after the housing bubble bursts, we are able to reset our economy because workers can live on lower wages which is a bubble itself. Chinese workers wages increased drastically in recent years due to exactly the same reason, too expensive housing. So the manufacturers are moving to countries such as Vietnam etc. we are luckier as we are rich in resources and have a relatively small and well educated population. China will have nothing left except the heavily polluted land and air.
"Record profits from our banks is reflective of the record household debt in Australia. So it's a weakness for the banks - with their mortgage-bloated balance sheets - and represents the greatest threat to Australia's banking stability and economic outlook. "
-- Agree. At the end of the day, Prosperity only comes from innovation, improved productivity and infrastructure. A nation of housing speculation has no future.
