Having the can pushed down the road has been good for me. It's given me an opportunity to come up to speed on whets been happening, and has allowed me to prepare. Anybody who took note of 2008 is coming up on 3 years of preparation time by now.
Very true. There's no mistaking we're living on borrowed time now. The 'solution' to avert the 2008 slump did nothing but prolong the inevitable and will actually make the end result much worse than it needed to be. There's a reason why I am such a strong opposer of Keynesian economic theory, although it won't really become apparent until the party is finally over as to why with the masses. No politician in Australia has stood up since Keating and told the sheeple of this nation that a downturn is good for the economy, or that it's needed to recover quickly and strongly. Everyone simply has so much debt now for the basics than they did even 15 years ago during the last recession, they vote for pollies who will perpetually strive to keep kicking that can down the road until they're debt free. But the market simply won't sustain that kind of abuse long term. We're basically looking at solving our economic woes by giving a crack addict ever increasing doses to keep him high and it's going to end in tears. Whether we pay for it now or in 20 years from now and your kids have to pay for it, rest assured, this situation is simply not sustainable long term.
The problem with kicking the can down the road and giving people a chance to "get out if jail" as it were is that most people in Australia have instead interpreted the situation as "there's no problem here mate" and kept doing exactly the same thing.
It did prolong the inevitable but I'm not sure about making it worse than it needed to be. As stedlar points out, we've now had 3 years of preparation. Surely that puts us in a better position than having the rug pulled out in an all out economic collapse. It doesn't solve the problem but surely it must make for a softer landing. Time will tell I spose. C
True. The success of the stimulus will depend on how many people saw it as a warning and how many carried on oblivious to what is happening. I don't think anyone would argue that the GFC was not a wake up call for a lot of people. They may not be at the top of the game buying PM's but I think plenty of people will have done some deleveraging and started saving more, particularly those who were sailing too close to the wind. That doesn't solve the problem but at least it helps to soften the blow a bit. I know a lot of people here are pinning their hopes on a US style crash so they can enter the market. If the SHTF and such a situation was to eventuate I'll bet most of these people would still not buy a property. The best result for all is a gradual deflation back to a more affordable level. C
To those who are informed and took the wakeup call for what it was? Absolutely. For the majority of sheeple though, it was nothing but a blip on the radar and the market will just keep rolling right along. It's not like this sentiment hasn't been seen before : "There is no cause to worry. The high tide of prosperity will continue" - Andrew W. Mellon, Secretary of the Treasury. September 1929 Stock Prices Will Stay at High Level For Years to Come, Says Ohio Economist . -Dr. Charles Amos Dice, professor of business organization at Ohio State October 13, 1929 "FISHER SEES STOCKS PERMANENTLY HIGH" -Irving Fisher, Yale economist, October 16h, 1929 Brokers Believe Worst Is Over and Recommend Buying of Real Bargains New York Herald Tribune, October 27, 1929 October 29, 1929 Stock Market Crashes! 'BUSINESS CYCLE' SEEN AT NEW PHASE; Bankers Hold Downward Trend in Markets Indicates Recovery Is Near. DENY ANALOGY TO 1920-21 Economists Point to Superior Credit Conditions Now, Holding Easy Money Points to Revival. -July 6, 1930 "Three or four million heads of households don't turn into tramps and cheats overnight, nor do they lose the habits and standards of a lifetime... They don't drink any more than the rest of us, they don't lie any more, they're no lazier than the rest of us.... An eighth or a tenth of the earning population does not change its character which has been generations in the molding, or, if such a change actually occurs, we can scarcely charge it up to personal sin." Federal relief administrator Harry Hopkins, 1933 "How many men ever went to a barbecue and would let one man take off the table what's intended for nine-tenths of the people to eat? The only way you'll ever be able to feed the balance of the people is to make that man come back and bring back some of that grub that he ain't got no business with!" Louisiana Senator Huey P. Long, 1934 There's only 2 constants you can derive from this. 1 - History always repeats. 2 - The sheeple have short memories and never learn. For those that will fall on their swords through this process after years of abuse for being a 'doom & gloomer', I have absolutely no sympathy.
