Its not as simple as that. There are still plenty of goods out there that were locked in for import at .80cents. Now the dollar is stronger people can buy tax free goods much cheaper offshore. If the dollar dips as all the stock is replaced with goods imported with a stronger dollar retail sales will boom as you will be able to get the service from a local at a similar price you'd pay online. Some lead times from china have blown out over 6 months but the price gets locked in. As more and more online stores appear, the cost of doing business online goes up also, just check out google pricing. These overheads will need to be covered. On average about 30% of people buy on price alone. 20 years ago these were the people wasteing half your day playing 5 shops off against eachother and not putting much in the till anyway.
absolutely - it's never as simple as people make things out to be. I guess my original point was that in some ways the mining boom has been good for retail and it's not simply one or the other. it's all part of one economy after all and everything is interlinked.
You posted while i was editing my last post I wish that I had some answers and solutions, I don't, but as you brought up, the crushing over-regulation by the government may well be the best thing to start with. I know that they could never administer charging tax on imports under 1000 dollars, and it would disadvantage so many people unfairly, so that's really not an option I think. I am grateful that I don't own a camera shop or a book shop of any shop that sells small, lightweight sub 1000 dollar items that can easily be imported by mail. I do wish that our government could play the "currency wars" game better though, but we are a minnow on a fast flowing river there.
Errol, Was it a bailout or the offer of 'free' money? If the Fed offered WBC & NAB an interest-free loan, why wouldn't they take it? I'm playing devil's advocate here: I think they were in the poo, and needed the currency. Am very quickly reading thru Mike Maloney's Rich Dad Gold & Silver Investment book. An amazing read. History DOES repeat itself, time and tine and time again. Stick to PMs for the greatest transfer of wealth in the history of time.
One of the problems is that the government, with all it's tiers of government and sub-contractors, is in all probability the biggest employer. Whilst I cannot confirm the exact figures readily, it is my estimation that close to 40% of adults in Victoria are employed either directly or indirectly, by either the commonwealth, state or local government and associated qangos. All of which rely greatly on your tax dollar for their existance. Australia would/will weather the coming storm much better if these, essentially non-producing, instrumentalities were reduced drastically.
'interest' free money is still a bailout. And of course they will take it - whatever prolongs their lives til the next quarter.
Bingo. It's a frought one though, because the people that work in those jobs are still Australians, and they still need work. A bloody tough question that one - employ people in non-productive government jobs with big protections and entitlements, or shrink government to a sane size and endure the dislocation of all of those public "servants". (Not for one moment implying that all P.S. jobs are non-producing, but there is a significant percentage that really do seem to take the piss so to speak.
I think you are underestimating the amount of $$$ that was pumped into our banks. NAB and Westpac received large amounts of financial support from the US Federal Reserve, totalling US$5.59 billion: NAB: US$4.5 billion Westpac: US$1.09 billion http://forums.silverstackers.com/topic-4624-australian-banks-tapped-fed-for-funds.html
rbaggio. Thanks for providing the correct figures and the link to support them. I love to contribute to this forum but because I'm not the best at IT I sometimes leave my self open by quoting financial situations(from memory) from past posts to this site and which in my opinion have been made open to challenge by fellow stackers. I am slowly getting better at getting around the internet and it can become stressful if you are past your prime and you bite off more than you can chew. By the way I never worry if what I post is disputed and proven wrong. The point is I'm not always right but I'm never wrong. rbaggio Once again thanks for you post. Regards Errol43
Errol finding stuff with Google is a word game - it's a matter of putting in the correct key words and phrases, it's like playing chess. You get good at it with practice, try making a game of it and searching for something, and then look at what comes up in the top 10 finds and try to get a feel for how the search engine interpreted your words.
This discussion is why I enjoy SS so much. So many valid opinions and things to think about. For my part, I think we're heading back to a combination of the 70's and 90's with globalisation the wild card. The most immediate effect for economies around the world is the new 'saving' paradigm. People are saving and hedging a future they know is scary. Credit card debt is dropping, people are starting to pull their debt down . Of course there are 'bulls' who want to be rich who are gambling, but most ordinary people are being careful . Hence retail is sliding and housing is sliding. I believe that people have an instinctive awareness that things are 'too good' and a correction isn't far away - the Matrix concept that humans abhor a perfect happiness. I totally agree that the 'world' economy is a confidence trick and I'm expecting someone to shout out that the Emperor has no clothes, fairly soon. There are some assumptions I made a while back that have helped me, so in the interest of sharing: Debt is a short path to slavery Governments are inept and selfish, the greater good is incidental. Don't rely on them for good. Most people are basically good but lack of education makes them act in bad ways. The habits of lessening consumption, rational saving, good deeds and hope in a good future will bring their own rewards. Greed will sink you everytime. It's like an immutable law that greed will cause you loss and pain. But selflessness will do the same if you aren't selfish first. And on the mundane. Retail down, house sales down, savings up, major disasters, reliance on China. Time to take stock of your circumstances, downsize or remove debt, become self-sufficient and hope for the best. Then if things get bad you're in a better position to face life. If things get better you're in a better position to enjoy life. If things stay the same, you're in a better position to enjoy life. I see that as 2 to 1 odds for action now.
the problem is that by saving instead of spending, the economy goes down and people lose their jobs, and thus cannot save. Getting back to the retail thing, (but also manufacturing and services), if the public close their purses, businesses cut back staff. There is no easy answer to this, seems we are screwed if everyone keeps spending money that they don't have, and we are screwed if they stop spending and start saving and lose their jobs in some sectors because of reduced spending. Quite the mess we have been led into. The music stopped and all the chairs are in a different room to the one that we are all standing in.
You're leaving exports out of the equation? Articles like the one below http://www.carsguide.com.au/site/news-and-reviews/car-news/holden_export_loss_eats_profit are being replaced by ones like below http://www.themotorreport.com.au/50768/holden-commodore-series-ii-exports-to-brazil-announced Savings should never be seen as a bad thing - there just may mean a period of adjustment.
I agree, savings is always a good thing, I was simply musing on the "damned if you do, damned if you don't aspect of it all.
yep me 2 i love the different opinions that why i posted the topic sometimes i live in my own world where everything is fine i dont have many worries anymore but its enlightening to hear others concerns
My guess is that we might be like iceland, just a bigger version of it. We will all take a battering if the great GFC 2 is as serious as we all think it is. But out of all the countries, places like Australia, new zealand and Norway for example should manage to make it back up the fastest or at least not go down as far as the others. Think about it. If we let the banks fail (like the icelandic people did), debt is wiped clean. People who made bad bets get bad haircuts etc. Many will go bankrupt. But we are sitting on a gold mine (pun intended) of resources. We have what everyone else wants. Food, water, energy, raw materials, we are pretty self sufficient in those things. So yes we will need to go through some tough times, but that being said, I do not see australians starving or drinking water from contaminated rivers like many will be forced to in europe/africa/asia. Would we be considered to be 'tanking' if we all went broke but had the tools and resources to work hard and start again? if we had to share a single tv (SHARE!?@#?@#?!?) amongst the whole family, or to share a family car but had 3 meals on the table, would that be considered good or bad? I guess for someone hungry and freezing in a parisian/berlin/tokyo suburb that would be the definition of a booming economy. All is relative. Just reckon that we have enough so that we will never be the worst off. That being said, if a foreign country decides to take our resources for themselves then all bets are off Just my humble opinion.
There's no doubt that the government's artificial stimulation of the property market has potentially made the problem worse by inflating the market even further into bubble territory. But what it also did was give those who were overleveraged or sailing too close to the wind a chance to get out of jail. It was only ever a bandaid mean't to slow the flow of blood and so far it is working. The problem is still there, the market still needs to deflate and has already started deflating allbeit in a fairly controlled manner which is what the gov were trying to acheive. It will be interesting to see what happens from here on in. C
