Dispelling the doomsday debt myths by the RBA

[Token Funder]

There is nothing socially or economically desirable for the cost of an essential good or service to increase at a rate greater than wages, irrespective of the fact that said increase in cost may benefit a particular cohort.

What essential good or service are we talking about here...Q? If it's housing, then why not...?
Who's wages are you talking about...and in what suburb for the house prices, relative to those wages you speak of....?
r
Apples with apples remember...

You're obfuscating.

Housing (that is, a dwelling in which people live) is an essential.
Are you of the view that the cost of housing increasing at a rate greater than increases in buying power is a good thing?
Would you take the same view of something like, say healthcare, food or energy?

No, you didn't answer my question, I suggest you are obfuscating not me...

Every essential item is increasing at a greater rate than buying power it could be argued.....but you need specifics such as what I have asked you...

In what suburbs is housing growing at a greater rate than 'buying power'...?
Remember to factor in the average wage for each suburb....

Your problem lies in what you class as 'buying power'....
Do we all have the same buying power...?...No...didn't think so...

Obfuscating indeed...

You are - deliberately or otherwise - complicating what is a fairly simple proposition. That is, that it is not a Good Thing for the costs of life's essentials to increase at a greater rate than income. Be it housing, food ,energy, health care or education - to name the obvious categories - costs rising disproportionately to wages diminishes quality of life and the competitiveness of the economy.

In the case of housing, the fact that you (possibly) or I (definitely) already own all we need and are only exposed to the up-side doesn't make it any less socially or economically undesirable. Though there are many ways to quantify the extent to which the underlying cost of housing assets have increased relative to household income in the last forty years, I don't think anyone disputes it has and the continuation this trend is worth cheering on about as much as is barracking for $3 pl petrol prices in 2011.

 

[MrCrumbpacker]

I don't think anyone disputes it has and the continuation this trend is worth cheering on about as much as is barracking for $3 pl petrol prices in 2011.

Hear, hear!

Unfortunately the Australian property market due to government intervention and tax policy, is no longer predicated on yeilds, as most if not all (certainly all the countries I've been involved with) other property markets are.

Capital gains is the game here, by and large, so rising property prices above inflation are required.

Does anyone see any potential problems with this?, after all it has worked for the last couple of decades.

 

[The Fence]

You are - deliberately or otherwise - complicating what is a fairly simple proposition. That is, that it is not a Good Thing for the costs of life's essentials to increase at a greater rate than income. Be it housing, food ,energy, health care or education - to name the obvious categories - costs rising disproportionately to wages diminishes quality of life and the competitiveness of the economy.

In the case of housing, the fact that you (possibly) or I (definitely) already own all we need and are only exposed to the up-side doesn't make it any less socially or economically undesirable. Though there are many ways to quantify the extent to which the underlying cost of housing assets have increased relative to household income in the last forty years, I don't think anyone disputes it has and the continuation this trend is worth cheering on about as much as is barracking for $3 pl petrol prices in 2011.

Sure thing TF...whatever....

I never said it is a good thing....

I do not cheer for people not to be able to afford housing....I feel for them....but it's still going to happen no matter what, same as more and more people can't afford the petrol you mention....or the food or the education or anything....it all goes up and certainly looks to be at a rate higher than wages growth....at times....then wages catch up and on goes the cycle... called inflation I think....

Sure, no one is happy that essentials are growing higher than wages and I don't wish it on anyone at all, but how are you gonna stop it...?

I choose to work harder and longer and to use my brains as well as my hands to get ahead...not sit there complaining...I'm frugal with spending yet I still have a life along the way in case the 901 comes around the bend and mows me down...there is a balance, but I deal with it every day and get on with it.

We might have to agree to disagree then....?

 

[Intrinsic_Value]

I choose to work harder and longer and to use my brains as well as my hands to get ahead...not sit there complaining...I'm frugal with spending yet I still have a life along the way in case the 901 comes around the bend and mows me down...there is a balance, but I deal with it every day and get on with it.

We might have to agree to disagree then....?

mate i really dont see TF on this forum as a 'whinger'.
I more see TF as i highlighter of potential 'risk', and that is why he is a very valued member of this forum in my opinion.

 

[.toe]

Sure, no one is happy that essentials are growing higher than wages and I don't wish it on anyone at all, but how are you gonna stop it...?

The fact you recognise that it's hard for anyone to stop it, should alert you that this could be a runaway train. All runaway trains stop eventually, if you cant slow them up they crash. If you were onboard you get hurt. If you watched from a safe place you get to rumage through the rubble.

If the problem is growing, then political pressure to change will grow. The govt will start changing things, that'll hurt someone. And the changes will prolly avoid the real issues (which they've been avoiding), so eventually that'll hurt to.

mate i really dont see TF on this forum as a 'whinger'.
I more see TF as i highlighter of potential 'risk', and that is why he is a very valued member of this forum in my opinion.

Agree. And I also agree that it's important to identify potential risks. Investing in a house or two is great, but if the big changes unfold then everyones position changes.

 

[The Fence]

mate i really dont see TF on this forum as a 'whinger'.
I more see TF as i highlighter of potential 'risk', and that is why he is a very valued member of this forum in my opinion.

Did I say TF was a 'whinger'...? (your quotation)

 

[Intrinsic_Value]

Did I say TF was a 'whinger'...? (your quotation)

my appologies, your post might have been refering to people trying to buy property rather than TF

 

[The Fence]

Accepted IV...your are right, I was referring to the general public.

And you're right also, he has way more little green lights than I do so he must be a more valued mamber than me,,,?

 

[Token Funder]

Did I say TF was a 'whinger'...? (your quotation)

I didn't take Thorpey's comment that way.

Spirited banter is all.

 

[urbanprospector]

You are - deliberately or otherwise - complicating what is a fairly simple proposition. That is, that it is not a Good Thing for the costs of life's essentials to increase at a greater rate than income. Be it housing, food ,energy, health care or education - to name the obvious categories - costs rising disproportionately to wages diminishes quality of life and the competitiveness of the economy.

In the case of housing, the fact that you (possibly) or I (definitely) already own all we need and are only exposed to the up-side doesn't make it any less socially or economically undesirable. Though there are many ways to quantify the extent to which the underlying cost of housing assets have increased relative to household income in the last forty years, I don't think anyone disputes it has and the continuation this trend is worth cheering on about as much as is barracking for $3 pl petrol prices in 2011.

yes they call it inflation ..its coming home to bite the credit livers on the behind . is cheap living out there if you know how to do it ..

people we are heading to depression 3 for modern times ..

http://www.youtube.com/watch?v=Tw5LaEzEcJw

wise words in this song .. something to think about ..some people study human nature as a hobby ..

here is a post from a m8 in canada


People get caught up in cycles without realizing they are in a cycle, like housing, or high stock markets, and when folks like yourself puts a warning sign in front of them..then only after sinking in, do they realize it. Is normal human reactions. We are at or near the top of a housing cycle here in Canada as well. It won't crash like the USA as our lending controls are so different than down south, but prices could come down 10%-12% very easily. As for wagons ..well mate, a wheel falls off every now and again...


someone i chat to about veg gardening and sustainability .. some food for thought folks ..

and just to leave you with something from my fave musician


http://www.youtube.com/watch?v=6gLDzDklTRU

and a musical take on whats going on it the world

http://www.youtube.com/watch?v=HTAXjZLwbTo


please comment on vids also