Had you been reading my posts on SS (Thommo then) you would have read the same thing. But you wouldn't be a gold baron because you wouldn't have believed.darn, had i read that peter's post back in 2006, i would be gold baron by now!!
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Had you been reading my posts on SS (Thommo then) you would have read the same thing. But you wouldn't be a gold baron because you wouldn't have believed.darn, had i read that peter's post back in 2006, i would be gold baron by now!!
Longer term members might remember this thread from 2006 (inspired by a Peter Spann talk which made reference to a Harry Dent book).
If nothing else, post # 100 on that thread (by Peter Spann and which does reference Dent) is well worth a read imo.
Spann should re-read it too. Might help him recover the losses of his 4 excela funds.
So, as I'm a novice in this area, I might try and encapsulate my thinking and some smarter economists such as Pitt St might be able to help refine it: If the US doesn't stop raising rates and printing cash its likely to build a bubble economy that will burst and leave a major mess behind. Far better to halt the money supply and wear the short term pain today to control inflation within acceptable bounds and minimise the impact of the collapse. Am I off the mark here?
i would believe you had i seen itHad you been reading my posts on SS (Thommo then) you would have read the same thing. But you wouldn't be a gold baron because you wouldn't have believed.
i would believe you had i seen it
but how does property crash there related to government printing money? i thought their economy tanked because of the housing market crash, not the other way around?Scanning that old thread is fun.
This from MichaelW sort-of summed it up:
Michael worked it out. Wonder why so few others did?
the availability of credit, and in particular easy credit, most notably to people who (as it turns out) could least afford it is another way to build a house of economic cards.
but how does property crash there related to government printing money? i thought their economy tanked because of the housing market crash, not the other way around?
hmm interesting, wonder if they did that on purpose, printing more money to build up the 'boom' knowing all along the economy will tank. sort of like last shot before going to die, except they are taking many other people with it, leveraging their losesWash your mouth out with soap. Property never crashes!!!!
The economy was tanking so "helicopter" Ben pumped up the property and share market to maintain the "wealth effect". So which was the egg and which was the chicken?
...Ben pumped up the property and share market to maintain the "wealth effect".
The interesting thing has been that economists outside Australia have consistently predicted a bubble in Australia's real estate market, whilst economists in Australia have predicted a mere slowdown. The reason for the difference is that the guys OS look mainly at ratios, whereas the folk down here look into further detail.
wonder how we compare to US, japan, ireland, england on those items. we are probably on better side if we compare to item number 3 and 4. however property bust (trying to avoid c word here) will probably affect those too.BINGO! That's why we get these wild claims. Even people like Stephen Keen are guilty of it too. They focus in on a narrow set of variables and don't take the full picture into account.
IMO there are several factors, which TOGETHER make up the strength of the property market.
1. Interest rates
2. Bank's desire to lend, and financial products created to allow this
3. Unemployment
4. General strength of the economy
5. Rental yields
6. Supply of new property
7. Demand - Number of potential entrants to the market
8. Government regulation (negative gearing, stamp duty rates, etc)
One of these factors cannot destroy the market. One factor going against you will reduce growth a bit. A whole lot will affect it more.
I think at the moment we're thumbs down on 1&2. Neutral on 8 and thumbs up on the rest. To varying degrees of course.
Think back to the boom times a few years ago. Every single factor was going in property's favour.
So coming in and only talking about debt levels is simply not taking enough factors into account. It's a complex market. More complex than many realise.
As i see it, sentiment drives prices of all but the basics of life, and even they suffer short term, illogical, reversals.
yeah i think sentiment does play big part in market. everyone sort of believe the property will tank in near future it's hard to convince them otherwise. global turmoil has played big part on that sentiment too@ Tubs I've seem similar lists in the past.
It wasn't on your list (not explicitly), but SF is right about the role of sentiment.
If people think there is a buck to be made they'll make the plunge (irrespective of the price - and that applies to property, shares, gold, whatever). And now (using NZ has an example) the interest rates are ridiculously low and banks are again out offering 95% loans, but the property market is zzzzz (because the sentiment isn't there).
If you truly believe that property is going to fall 40% or whatever, put your money where your mouth is and sell! Why do you care if the rest of the country does or doesn't?