We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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Detlev Schlichter is back from his holiday … And he returns to find the state of the world slightly worse. Things were, of course, pretty bad to begin with, so that’s like Hell being slightly hotter.
The idea that all this monetary madness is only temporary, only to help us get out of the crisis, and that the central banks have an ‘exit strategy’ – a term that I have not heard or seen in any discussion of central bank policy since spring of 2011! – is getting less tenable by the day. There is no exit strategy. Not in the US, not in the UK, not in the Euro Zone.
Calling Mitt Romney. Don’t worry about losing. Worry about winning.
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Detlev did not, even once, refer to the fact that Australia has had 21 YEARS without a recession! Whilst we have China and Japan, and their need for our minerals, to thank, we also have restructured our economy to make the most of our opportunities. It can be done! But you need far-sighted politicians, like Hawke and Howard, to carry it off. (Our current governments are living off their legacy!)
Australia has just entered its own housing bust, and mining companies are going broke in record numbers as commodity prices plummet. Demand from China is rapidly falling as their own bubble is currently in the process of bursting.
The looters are circling, trying to get one last bucketload before the well runs dry. I hope we are all busy sharpening our lamp-posts (or whatever)
Australia covered up a recession by borrowing money and doing the “helicopter Ben” thing by sending two lots of cheques for $900 to the bogans to blow on pokies, big TVs and holidays to Bali and New Zealand. We’ll have to pay for that sooner or later.
The only mining projects now going ahead are the ones already in the pipeline, manufacturing industry is rapidly dying due to the high dollar, the collapse of China will wreak havoc with the Australian economy and housing prices are falling.
Australia is in for a very hard time.
Wrong, you doom-sayers! The Aussie dollar is staying high because we are doing better than most other countries! The government could afford the stimulus because our budget was/is in such good shape!
And we’ve still got years of affluence because of the mining boom, even if it did stop now (which it isn’t).
Nuke,
You left off the sarcasm tag, you almost had me there.
Mike, I’m not joking. Our dollar is hurting our hotels because tourists find they can’t afford our prices. The magazine ‘The Economist’ attributes our success to our trade with China, and China’s economy is still doing well. Another burst housing bubble won’t damage the rest of the economy.
Nuke, what is the amount of Australia’s national debt, and what is the current private-sector output? Also, as someone much better familiar than I am with your present government: what are they likely to do when both your local bubble and the Chinese one burst?
Australia’s housing market is levels of nuts that make the comparison insulting to nuts.
Australia is different, though.
http://www.youtube.com/watch?v=CroTAVVcr9k
Alisa, That’s an easy one. We’ll get a ZIRP just like the USA. Our combined government(don’t forget the states especially Queensland after 20 years of Australian Looter Party rule – 80 billion in the hole, 4.5 million people), and private debt is huge. Our banks are hugely on the hook for private housing lending and if house prices fall 40% will likely be broke. They will of course get government bailouts. The whole sad “run out of other people’s
money “scenario will play out here in spades. It’s going to get ugly.
Whatever Nuke is on, he should offer it to readers here.
Yep Mike, I had no real hope even for a mildly surprising answer.
And when we hasn’t busy introducing hypothecated taxes to fund the compulsory acquisition of people’s firearms, John Howard spent much of the rest of his time inflating the housing bubble. (Few policies that I have ever seen are quite as idiotic as the “First home owners grant” – the policy by which the Australian government wrote large cheques (tens of thousands of dollars at time) to people who did not have a deposit to buy a house, so that they then did have a deposit to buy a house. This subsidy to the banks and construction industry did a fine job in increasing the prices of houses by similar amounts to the grant). If you value them by (say) rental yields or the size of people’s mortgages as a multiple of their incomes, they are just totally mad.
Australians are obsessed with the value of their houses, in a way that makes Daily Mail readers look entirely uninterested in the subject. Australian governments – party is irrelevant and they are all the same on this – know this, and will do quite literally anything at all to prevent house prices from ever going down. If that means destroy the entire productive economy to do it, they will.
Michael Jennings, the first home owners grant(up to A$21,000) was worse than you think. Having another $21000 gave you the opportunity to gear that amount(leverage for other than Aussie readers). Depending on the amount that the bank would lend per dollar you put up(sometimes deposits weren’t even required although that seems to have largely stopped) the $21000 could turn in to $100,000 to $200,000 on the price of a house and land.
Howard, the nasty little statist, gun grabbing garden gnome didn’t do nearly as well as people think. He certainly didn’t know when to quit and got us stuck with Rudd and now the red headed failed commie lawyer.
Mike, our unemployment level is less than 6%, which is much better than many other countries.
However, I agree that our politicians seem determined to wreck it! The carbon tax is just to keep the Greens voting with our minority government. That will teach us to vote for minor parties.
Brian’s (and Detlev Schlichter’s) essential point is correct.
The credit money economy is a bubble whose bursting can not be avoided – and that bursting will come soon.
The fiscal situation (in the United States, Britain and many other nations – although, PERHAPS, not Australia) is also hopeless – de facto bankruptcy is inevitable.
So why do I support Romney-Ryan winning the election? Surely supporting the reeletion of Comrade Barack (so that he can take the blame for the economic collapse) would make more sense?
I do not want the Comrades in power at a time of economic meltdown – at a time when civil society is on its knees.
That will mean (one way or another) a time of cutting throats and blowing off heads (those who want ideological war should be reminded of what it actually means).
David Hume said that reason “is, and ought to be, the slave of the passions”. That it is exactly what it should NOT be.
Reason must be used to AVOID the time when the dark side of the sould comes into its own – when the emotional satisfaction of cutting throats and blowing off heads (first for ideological reasons – later for its own sake) takes over.
By the way – although it is (and historically has been) much poorer, New Zealand may prove a better bolt hole for those who wish to shelter from the times that are comming.
Australia depends on mineral exports – and minerals are important things.
But New Zealand has (in relation to its population) more food and water.
And food and water are more important.