A friend sent me a link to this article:
http://www.jubilee2000uk.org/media/bubble010903.htm
It’s mostly focused on the UK situation.. still, interesting.
Thoughts anyone?
Thanks for the Link. A very thought provoking segment. There is a lott of sense in the article, and if we are to look at the Australian economy, not quite a mirror but there are similarities.
The biggest thing going for Oz is the fact that in the face of adversity, SARS, DROUGHT, SLOW WORLD ECONOMY, we have still managed to grow…..just, but it’s there!
Wages in Oz are going up, obviously not by huge leaps and bounds but the last point in the article said it all……..take home pay is king!
Bring on Rent, L/O, Wrap! Who cares if the capitasl growth is not as high as it has been, I can’t spend capital growth, I can spend $$$$$.
But that’s just my thoughts[
][][]…………….Food for thought, I think potentially very correct.
We are selling a couple of our properties to reduce debt, not buying any more at present, because the rest are just about paying for themselves.
For the rest I am learning some short term trading strategies with stop losses, and this does not tie up a lot of money.
its not a bad idea to take a few defensive strategies.sjs
excellent article. makes sense to me!!
i think we tend to look at the smaller economic picture ie interest rates, unemployment, historical highs and lows.
sometimes its much simpler than that.
ie we all owe too much.
rk says that it is a defeatest attitude to say ‘i cant afford that’ ie he says that we should be brave and say ‘i will find a way to afford that’
well, maybe hes wrong and we are all being a tad shortsighted
(this topic comes up once every 2 weeks, and it usually creates a frenzy – hehehehe[
])I think it doesn’t matter what and how you spend your money, even “investment” spending can be an over commitment, budget carefully and be prepared for any changes that might come your way.
I have no problem in offloading some property now to reduce debt.
I think “holding for the long term” is correct up to a point, you have to keep your debts manageable.“Credit and other paper ‘promises to pay’ now exceed levels of real income (GDP) by ten times”
This seems to be a sign that the debt bubble is about to burst.The biggest problem I have with debt as it is now is that the debt that a person is up for must be backed by something of real value. To say that properties (which have risen by over 150% over the last 5 years) have real value now is not true in my opinion. RE agents will argue that if someone is prepared to pay the asking price for a property (as is the case now) then that represents real value. This is true when mortgages are easy to obtain. But when they are extremely difficult to obtain and expensive (high rates), then that is another matter.
I would argue that real value is only supported by cash and not the book value of assets or other intangibles.
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