Wanting to find more information about this. Thanks everybody for posting information they have heard.
What have Labour got to do with it? A collapsing financial system, along with collapsing economy, was an inevitability before Kevin 07. Busts follow booms. Capital has been misallocated on a massive scale for more than a decade now. Yeah, the sugar hit was great at first, everyone's happy, everyone making money but then you pay the price down the line. Because it was fake all along, just credit fueled, and eventually the market recognises it as such. Here's an analogy. Let's say there's a guy who was doing well, but now he's down on his luck. Having his own personal recession if you like. You give him a credit card with a large limit and a low interest rate. The next few years he spends big. Has his own personal boom if you like. Can you guess where the story ends? Australia had it's own credit-fueled spending orgy after the dotcom collapse. All that spending was a huge driver for jobs. Now the bill has to be paid. Do we really think the Liberals stand outside the laws of physics and could just clear everyone's debts?
Bail-ins are coming to the entire Western financial system, probably in the 2014-2016 time frame. They've been written into law in the UK, USA, Canada, Australia, New Zealand and probably other countries I haven't read about. Forget about government guarantees. They won't be worth the paper they're written on. The IMF screwed up by revealing their hand too soon with Cyprus. The Federal Reserve has told the too-big-to-fails they won't be bailed out by tax payers the second time around. Any funds you have deposited in a bank account are an unsecured loan to a gambling addict.
Typically the government of the day, with access to privileged economic information, dictates fiscal/monetary policy for the term of their office. Regardless of events, they are ultimately responsible for the economic welfare of Australia. To put it in a more micro setting, would you (generic) who I presume is a homeowner with a mortgage, spend more than your income on discretionary items, restaurants, new cars etc expecting your financial position to improve? Unfortunately, historically, Labor as a government tends to be myopic regarding spending regardless of the prevailing economic climate. The conclusion is that if you (generic) support them, or any other political party, you (generic) are complicit in their actions. To believe otherwise, is foolishness.
Lest We Forget Pyramid; And younger stackers should take note of the interest rate shown in this ad too! (they work both ways) [youtube]http://www.youtube.com/watch?v=aRx2RbCXxy4[/youtube]
LOL, they even had the Freudian slip in their name: 'Pyramid' Building Society. Be a bit like buying shares in a company named 'Ponzi'.
They have everything to do with the morass. Labor collect more tax now than under Howard, as the real economy is strong thanks to previous (Hawke/Keating and Howard/Costello) reforms. And despite this massive dose of revenue government spending has absolutely ballooned with no regard for the consequences. In regards to Private debts Australians (excluding the government) have begun to turn around their private debts and indications are they/we are saving again, or at least drawing private debts down and not expanding them. Individuals have sense, Labor governments do not.
So the big idea is get Liberal back in and they can restart the bubble machine? Do they have any other ideas? I'll answer for you right now. No. This all goes back to what I was saying in another thread about what the government does is unscientific. ie. none of them know what they are doing. They certainly can't calculate all the unintended consequences of their actions because the system is far too complex and you can't gather the necessary data nor do actual theories exist. That's why they have one answer. Get people borrowing and spending. Don't worry about when debt becomes too high because that's off in the future. This is their one and only trick. They don't have any others. The reason Labour aren't using it and are going the public debt route is because private debt is saturated. It was either that or go into full on austerity mode. I wonder if people would have been whingeing about that...
Its starting to look like , I may have to adopt Nan and Pops banking system....the good old mattress. And for those with SMSF in the bank....now could be a good time to start thinking about the shiny stuff. I also believe that this will also have detrimental effects on further weekening the aussie dollar..... sound familiar with whats happening OS Looks like we are getting ready for a new monetary system supported by Gold Standard I'm no economist.....but something fishy is going on.....and I don't think its as far away as many people are predicting
Also, a government guarantee doesn't mean you'd get your cash back. You're more likely to be compensated Cyprus-style (being issued worthless shares in the bank).
Back in 1893, (I was only a lad at the time) the original Commercial Bank of Australia Ltd closed its doors during the Victorian 'Land Boom'. The shareholders lost ALL their money, and in the 'Reconstruction' the depositors were given Preference Shares paying 2%. They were traded on the ASX and only sold when someone died. They were paid out when the Bank of NSW took over the CBA in 1982.
