Melbourne, Sydney etc are not Paris or London......don't even dare compare the 2. No matter what our big ego as Australians say.....we are not even close.
Your other point about interest rates being lowered to 0% (see Japan) is a good point.......but, it will not have the desired affect because people are already up to debt to their eyeballs. Japan is still going through a decade long deflation, and it's rates are VERY LOW. It has come to a point that people just cannot take on anymore debt.
Another thing that I don't think you realize is that how deflation affects consumer psychology. If deflation happens, we will start seeing job losses (primarily, firstly in the retail sector, and most certainly in the housing sector), which means people will be 'tighter' with their money, which leads to a vicious circle of low consumption, lower empliyment, and lower velocity of money. People might have money in the bank, but they will think twice in going to the Whitsundays for a holiday.....opting for a caravan park in Lorne........you get my drift ?
So it's as easy as easing interest rates.
In my opinion we are up for a wake up call.....we cannot go on consuming without producing the equal amount..........it is basically gonna be a hangover.
Your other point about interest rates being lowered to 0% (see Japan) is a good point.......but, it will not have the desired affect because people are already up to debt to their eyeballs. Japan is still going through a decade long deflation, and it's rates are VERY LOW. It has come to a point that people just cannot take on anymore debt.
Another thing that I don't think you realize is that how deflation affects consumer psychology. If deflation happens, we will start seeing job losses (primarily, firstly in the retail sector, and most certainly in the housing sector), which means people will be 'tighter' with their money, which leads to a vicious circle of low consumption, lower empliyment, and lower velocity of money. People might have money in the bank, but they will think twice in going to the Whitsundays for a holiday.....opting for a caravan park in Lorne........you get my drift ?
So it's as easy as easing interest rates.
In my opinion we are up for a wake up call.....we cannot go on consuming without producing the equal amount..........it is basically gonna be a hangover.