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Aussie Dollar Tests Long-Term Trendline As China Contagion Spreads
Last week, we asked "Is Australia the next Greece?" It appears, judging bu the collapse in the Aussie Dollar, that some - if not all - are starting to believe it's possible after last night's 15-month low in China Manufacturing PMI. As UBS previously noted, China's real GDP growth cycles have become an increasingly important driver of Australia's nominal GDP growth this last decade. With iron ore and coal prices plumbing new record lows, a Chinese (real) economy firing on perhaps 1 cyclinder, and equity investors reeling from China's collapse; perhaps the situation facing Australia is more like Greece than many want to admit.
Australian consumers are more worried about the medium term outlook than at the peak of the financial crisis, and rightfully so...
As China plumbs new depths in manufacturing, just piling on Aussie's woes...
The Dollar is rising this morning but all eyes are on AUD as it tests a very long-term trendline...
h/t @RaoulGMI
* * *
As The Telegraph previously concluded, rather ominously,
The problem is that Australia, after decades of effort to diversify, is looking ever more like a petrodollar economy of the Middle East, but without the vast horde of foreign currency reserves to fall back on when commodity prices fall.
Instead, Australians must borrow to maintain the standards of living that the country has become accustomed to, which even some Greeks will admit is unsustainable.
Charts: Bloomberg
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And the Aussies sold mostly of their gold reserves also, which was a mistake. I suppose they could nationalise the gold mines....
Add to that a property bubble that has sucked the air out of all productive enterprise. To wit: almost half the stock market index is comprised of banks and financials. Half of the banks' assets are residential mortgages. And almost half of new mortgages goes to property "investors". Farcically circular. Furthermore, the Aussie stock market is being infested with blatant fraud schemes, both domestic and international.
Check out my recently updated blog on Australian financial crime:
http://drbenway.blogspot.com/ncr
Dude, that last paragraph was dark, but I'm afraid, sadly, that it's true.
Yes, Australia learned its skills from the City of London, where in England a very similar situation prevails regarding the financialisation of the economy and stratospheric property prices. It can't end well in either country as disenfranchised younger generations start to realise they have been screwed.
I'm not Australian but I truly don't understand HOW Sydney property prices have continued to rise from already stratospheric levels? When will the inevitable crash come? I understand that property prices in Perth (Directly affected by the mining bust) have already dropped by 30%? Surely Sydney and Melbourne, which provide the services to the Miners (Banking, Insurance, Legal etc.) MUST also be affected?
This is the Oz problem, the highest personal debt in the world.
http://www.smh.com.au/business/the-economy/australian-households-awash-w...
http://www.australiandebtclock.com.au/
they are screwed.
At least we have the world's largest silver mine
The numbskull politicians will encourage Chinese companies (aka The Chinese Government) to buy Australian mining companies (and other assets) and bullshit everyone into the believing that the Chinese Predator will save them. Attached to any deal with China will be relaxed immigration standards (if not already in place). After a few years the labor in the mines will be nearly all Chinese working for minimum wage and speaking mostly Chinese. Nearly all of the production will be sold to China for rock bottom prices. The OZ government will lose massive tax revenue, will dilute its population and culture and be much worse off than if it simply took the hit and started over. Once housing prices decline 80% across the board and the banks collapse the re-building could be a renaissance for Australia. But that would be difficult and everyone knows that politicians don’t do anything for the good of the country if they can take short term remedies to long term problems and extend and pretend and make it someone else’s problem.
Adios Australia! I did like your beer, women and hats.
our hats are shit
made in China
The chinese may be attacking gold in order to bankrupt and buy the australian, mexican, african mines.
The US population is equal to the rounding error in estimating the chinese population. If the Chinese government wants gold in size, they need to own the mines.
The lucky country can't be screwed, we have the luck of the Irish!....oh, wait, hang on a moment.
Um hello what is AUS #1 export earner? Oh look it's tourism, which booms when the AUD is low. And the flow from China is staggering, they get off the plane from Beijing, they find air they can actually breathe, food they can actually eat, water they can actually drink and swim in, and their first stop is the realtor's office. Put junior in a great university, have him learn English. AUD could easily touch $0.62 but I doubt it goes/stays any lower
62cents, time to stock up on some more debt free aussie gold miners
Property prices have not dropped 30%in Perth, 1 or 2 % maybe, only in mining towns in the middle of nowhere in WA have thay dropped 30%
OK, I believe you. My information was anecdotal and may very well have applied only to mining towns in the outback. I'm actually just trying to answer the question "Why have property prices NOT collapsed with the AUD and the economy? Is the Central Bank involved in some way or are normal market forces dead? I understand that in Forex terms, prices are now much lower (Aud has gone from USD 1.10 to USD 0,72) but that is not normally how property prices work. Something doesn't compute here?
Rich Chinese no longer laundering their money through Macau casinos most likely, and silly young professional Aussie's levering up to compete with them because they can't lose (prices always go up don't you know).
We haven't had a recession here in something like 22 years - just boom boom baby - money everywhere. It might be hard for people from other countries to really understand that there are a whole generation of young professionals who have no real idea what a recession is like to live through.
They are about to get a Master class....
"Why have property prices NOT collapsed with the AUD and the economy? Is the Central Bank involved in some way or are normal market forces dead?
From what I have read the Aussie banks make American sub-prime lending look like a high water mark.
Maybe some of the ZH Aussies here can tell us some stories.
Aus, and NZ (it's smaller but smarter cousin) are desirable places to live.
With a world falling to shit in so many ways, there are a lot of wealthy rats deserting sinking ships.
ALL of the major Australian Cities are beautiful. BUT NZ is a stunningly beautiful country so I can fully understand why the US Billionaires want to get a toehold there. And their Sauvignin Blancs (Cloudy Bay for instance) are out of this world!! In fact, on a 35 degree Bali afternoon, I am sipping on a glass (Or two) right now. Cheers.
PS. their Pinot Noirs are pretty decent too!!
Lending standards are as poor as anywhere in the West. But there has been some restraint from our CB. The finance industry tried a few years back to pressure them to lift the lid on the old school 12:1 limit on fractional reserve banking but the CB said no, the cap stays.
Sydney property prices a function of ...
- record low interest rates
- double the average OECD immigration rate
- city surrounded by national parks (no building)
- foreign investment rules being flouted.
Our city seems to follow Canada's Vancouver.
We too are a resources based city that the Chinese have targeted for investment. Locals no longer able to compete.
See my comment below about artificial supply restrictions.
There was a headline the other day about $600 B leaving China. That's sloshing around the world currently pushing house prices higher in London, NY and Oz not to mention a few others.
Also keeping the prices high the governent is careful not to release too much land for development, outside of Sydney. Sydney has its own issues with geography. There is never over supply. Even rentals are tough to get.
To give you an idea at an auction the other week the opening bid was 2M for a 4 bed small section detached house. 5 bidders slugged it out. The same sized property in Denver would cost $400K.
Short answer:
Cashed up Chinese buyers love Aussie real estate, the deteriorating Australian dollar also works in their favor.
Beat me to it :)
Australian housing is unlike anywhere else on the planet. We haven't kept out prices high through artificially inflating access to credit. We've kept our prices high by artificially restricting supply.
It's very easy to keep prices going up when you've got 1000 new people through immigration for every new home being built, and there's already a housing shortage.
as well as high growth of incomes, negative gearing and the fraction part in frac res bank?
Here in Perth there is more low cost housing estates being developed than I have ever seen. North Perth, East Perth, South Perth not to mention every mom and dad subdividing their 1/4 acres for either triplexes or double green titles.
I own a demolition company so business is booming.
If immigration is increasing faster than land is being developed, they must have fully opened the floodgates.
Opened the immigration floodgates to dilute and destroy the Caucasian majority like has been done in the United States, Canada, and Europe?
You must understand. Australia as a country is full - there is simply no space for new housing.
Hence. House prices will inevitably continue to rise in Australia.
That's certainly the narrative every level of government is telling.
Of course the fact that they all get significant tax (and therefore salary) boosts from higher and higher real estate prices has nothing to do with it at all.
You must understand. Australia as a country is full - there is simply no space for new housing.
I do hope that statement is meant as sarcasm. Anyone who has every flown across Australia, north to south, east to west, can tell you that there is empty space for hours of flying time.
Less than 1/10th the population of the US and more land mass - yep, "full".
What? If the US can build mammoth cities in the desert (Phoenix, Las Vegas, Tuscon), so can Australia. Australia has an extremely low population density. One of the lowest in the world. I didn't say it was first, I said ONE of the lowest. Of course, you would be better suited restricting immigration but business will bribe otherwise.
I'm still not getting a clear understanding as to WHY Sydney RE has not crashed? Yes, Chinese money might be a part of it but cannot be the whole answer as to why Sydney RE seems to defy the laws of gravity? Supply (Lack of) and Demand do seem to be playing a major role BUT Australia has no shortage of land (Like England) and foreign money will not flow in forever, especially when younger generations of Aussies start to object to being priced out of their own country? Does this mean that as soon as China seriously cracks down on Capital outflows (Which it WILL have to do some time soon) that Sydney RE will crash?
The country I live in, Indonesia, has a policy that foreigners cannot own Freehold property, which actually seems like a sensible policy if Government has the interests of "We the People" in mind? Not many do, of course..
High immigration and highly regulated land releases = high demand vs short supply. Not hard to understand, really. Next door neighbour bought a house today for $1.3million. Small house on a small block of land. Crash is inevitable.
Which means that future generations will never be able to buy a home. That doesn't seem like a promising social adhesive?
Great blog Dr Benway!!
Thanks, much appreciated!
Many aussie gold mines are very cheap at the moment and are probably a good hedge against the falling aussie dollar, some have a AISC of AUD$1100 or less, no debt, cash in the bank and aussie gold at AUD$1500, and that is with Gold currently being crushed.
Let the good times roll.
Borrow to live well; sink and die when your turn in the shitter has arrived. Like even high school economics will tell you there are cycles. So borrow and spend like a nut case until they carry you away in the fart cart. Does anyone, anywhere learn the lessons of the past?
Lots of oversold commodity sector areas, a Bear market rally should be taking place soon, maybe even a 50% retracement of the mining sector...timing is key.
Easy money...
Juge rally AFTER QE, for now it's just plain déflation until Yellen says the magic word
It kind of looks like with all this 'sudden' bad news coming out around the world that yellen will unfoetunately have to cancel the 25 basis points interest rate rise.....mmmmm.
You mean the same "Imminent" 25 basis point interest hike (Followed by strong statements that that is IT, followed by QE4) that the Fed has been talking about for the last two years? The only wonder is why The Fed still has ANY credibility whatsoever, but I suppose that the folks who drive the "Markets" are all Fed Insiders who do their bidding in exchange for free money?
Yes philipat, thats the 25 basis points I was alluding to, supposedly when its done it will mean everything will have returned to normal....
Yellen can change the narrative such: "Low interest rates have artificially prevented poor performers in the market from going bankrupt, creating oversupply which is contributing to deflation. To stave off deflation we are compelled to raise interest rates
voila!
http://www.politico.com/story/2015/07/john-kerry-iran-stop-death-to-amer...
John Kerry begs Iranians to hold their tongues until he and Obama wrap up approval of the nuke deal. U.S. negotiators pressed the Iranian government to stop calling for the destruction of Israel and to curb anti-American street demonstrations during talks in Switzerland and Austria that led to an international nuclear deal, Secretary of State John Kerry said Friday. Requests to stop taking a hostile position toward Israel were part of the negotiations, and “I also told them that their chants of Death to America and so forth are neither helpful, and they’re pretty stupid,” Kerry said at a Council on Foreign Relations event in New York.
"neither helpful, and"
I rest ma muthafuckin' case ya hona. Muthafucka comun up in heahr like a muthafucka an shiit.
Shiit, muthafucka. Dat be sum muthafuckin' shiit and stuff.
Neither out, and in,
Muthafucka
Canada has nil gold too, these colonies have been raped... ripe for the taking control of their resources by the zion masters
for more on the zion masters see http://smile.amazon.com/Against-Our-Better-Judgment-History/dp/149591092...
Probably why the IMF just got so tight on loans, the time has now been chosen.
Largest Gold Reserves in 2013 from World Gold Council:
1: US
2: Germany
3: IMF
4: Italy
5: France
6: China (which is probably #1 now)
7: Switzerland
8: Russia (which has probably moved up)
9: Japan
10: Netherlands
11: India
12: ECB
...
31: BIS
32: Greece
...
In the SDR we go ?
So, da joos are better at trading than you? Stiff shit, eh?
"Borrow to maintain standards of living"
Welcome to America!
"Print to maintain living standards - Welcome to America" There ya go, fixed it for ya. The beauty of having a Central bank owned by the Private TBTF Banks is that the same Banks can bribe the Politicians to do whatever they want and at the same time keep printing money so that the Politicians can, when the crash comes, blame the Central Bank whose Billionaire owners frankly don't give a shit. Nice scam hey?
Biggest problem in Oz is not their dollar but the severe state of socialist rot, that is what has constrained their economy to being mostly based upon shipping pieces of Oz to the chinks.
My suggestion to the few remaining virile Aussies: purge all the socialists, end all income taxes and all entitlement programs, abolish all labor unions and business-stifling labor laws, then you will prosper.
As an Aussie, I couldn't agree with you more. Problem is, what you are suggesting is a lot easier said than done.
We have a political system that is completely gridlocked due to an unworkable senate. Our labor political party (the opposition) is nothing more than an extension of the labor union movement. In fact, the leader of the opposition is nothing more than an ex union boss (thug).
What hope do we have of reform? Zero.
Banana Republic, here we come.
By the way, the Aussie dollar has not collapsed. It is just returning back to its rightfull slot in the grand scheme of things. If it gets to 0.50 usd, then we will start calling it a collapse.
@Prober. I hear you BUT that formula didn't work too well in the US did it? I never thought I would hear myself saying this but in a war with the 1%, which is what we have, Unions are perhaps the last line of defence?
In the USA, 60% of gummint spending is on ENTITLEMENT PROGRAMS for the proletariart masses -
paid for by the declining minority of successful & prosperous people
This is an IRREFUTABLE FACT
so the proletariart masses and the politicians who pander to them and buy their votes with entitlement program bribes are the winners - NOT the top % who ACTUALLY PAY THE OVERWHLEMING MAJORITY OF THE INCOME TAXES.
That mining tax which we never had because it might upset overseas super miners would have helped a lot now the boom is over, instead Australia will just be left with some large holes in the ground and over priced realestate.
Ready-made large holes in the ground are great when you expect to have a lot of bodies lying around.
As one of our miners says "Don't piss off someone who digs holes for a living."
Australia is not especially socialist, but the socialists have taken over all of the institutions. The Royal Commission into unions is revealing widespread corruption, but the leftist media won't report it. Fortunately the blogosphere is destroying the MSM in Australia. Keep up the good work, Tyler.
I'd be looking for a retrace in the commodity sector. You can ask all the 20-30 somethings in the "peanut gallery" about that.
You know, the traders that have NEVER seen interest rates over .020 (twenty basis points)
I had to make sure my back~up login was working. It's almost 4 years old.
Those Iranian dictators (Mullahs & imams) could confiscate my life, if I'm not careful.
As an Aussie,
it has become a land full of immigrates who risk their lives to get here in small boats and why wouldn't you?
In the poorer area of Melbourne where I live there has developed a Somalian zone where some cafes have opened to cater to this crew.....they seem to sit around all day on mobile phones, laughing, smoking ciggies and drinking coffee.......and when that is done they stagger over to the bottle shop and buy a 4 litre cask of wonderful Fruity Lexia.....a white wine which tastes like liquid boiled lollies.....
No doubt of some sort of Government program.....life seems good for some of them.......because when you startt to feel ill from all the Fruity Lexia.....you get free medical care as a Aussie.
My last 'team leader' was a Agency casual who was Indian who had only been made an Australian citizen a few weeks ago.
He was mumbling something about buying a house and wanted to know if I knew anything about that.....work has died at that place in last few weeks,
Just last night I was unloading a truck container where we being paid $53 after 8.30pm an hour to stack cardboard boxes......I mentioned my usual pay rate this kind of work is about $24 an hour......this guy who looked like he was maybe from South America scoffed at that rate and called it shit.......he had an accent and worked hard for his $53 hourly rate......most likely thinking all places pay this sort of stupid rate of pay.
Another guy mentioned that a labour Agency guy, had just worked at this same place - a large DC that sorts out boxes...like a mail centre for clothes........totally unskilled labour.....yes a bit of lifting had just earned $90,000 aud in one financial year......pick up a box and put it on a belt.
Lol.......
I have a stake in OZ, and I can assure you that importers are putting massive pressure on the Glen Stevens "shenanigans".
Last Wednesday It was suggested that commodities were oversold, and that bonds weren't a safe haven.
You can thank the "Hedge Funds" in Japan running money through New York, for a large portion of the Aussie selloff. The BoJ is trying to mask inflation.(put PPI and RPI in the right columns for bond holders)
P.S. Trendlines mean Jack Diddley--- Gold cracked a multi~year trendline and was subsequently bought. ;-)
Actually, it's more simple than that and it's called "Supply and Demand", aka "Economics1.01". Australia's economy is based on Financial services and commodity exports which, depending on the point in the Cycle, is OK. But a much more diversified economy would provide better support during the down cycles?
I hear a service economy is all the rage at the moment
"Diversified" does not mean "Services". In fact, other than Commodity exports, Australia's economy is already "Services". You probably never heard of "Maanufacturing"?
No actually, it's not that simple Phil.
Whats' happening is that traders are cross hedging Australian bond yields.
Traders are effectively shorting the Australian dollar and buying it's bond market simultaneously.
Traders are (Japan) buying the carry currency (usd) and swaping it for Yen, then shorting AUD vs Yen knowing that the Aussie bond market is small and Illiquid, and using that to set F/X rates, and making the exchange profitable, even though they're losing a few basis points on the sell side.
Japan is the culprate along with some East Asian and Middle Eastern cohorts.
YC you should have ur own blog. id read dat.
Interesting point Y. So its the opposite of the Yen carry trade as in Sell Yen, Buy Japanese equities and Short Gold? With a strong USD I did not think that it would be a "Carry" currency?
Yes. A simple economy based only on export of mined commodities has a very fragile basis for long-term sustained growth and health. Without the single core exports the local economy will collapse...not much to debate. This fragile basis makes it easy for financial vigilantes to take advantage...so there it is.
Australia may go down before others, but all in the economic chain will eventually succumb to the deflationary spiral and commodity bust.
Over 6 years of fiat financialization created the now popping(ed) bubble.
Yes, I have two friends in Perth buying property at the moment, I think they are nuts, but they seem confident in the lucky country.
"All black people look the same, when I drive by the cafe, I see the same ones sitting there all day."
When will you realize that the immigration problem is a diversion, and that your house is being robbed by those in power via the back door?
Do you realise that hardworking Aussie citizens are paying taxes for the immigration "diversion" so that the Somali and other unemployable immigrants can live on the dole and sit at the cafes everyday looking at their mobile phones, laughing, smoking ciggies and drinking coffee?
I had an English friend in Melbourne who worked all the holidays he could in retail at a big store in Melbourne, mandatory 2.5x pay so I believe that was like $55 AUD/hr for him. A retail job. All he did was ring up shit on the cash register, amazing.
Until the NWO is defeated everyplace in the western world is likely to be the next Greece.
I've watched Oil get slammed down for almost 2 weeks during the London prime trading hours. Just a bit before the( 1-3 hours) before the N.Y. Open
This is a collaborated trade. It continues in N.Y. no matter what the macro is. Look at the 30 minute CL chart over the last 10 days.
Gold get slammed in Asia then Oil gets slammed a few hours later. Gold waffles around and Oil gets hammered slowly lower.
Who benefits most from these types of moves? I have my thoughts, and they're disturbing.
I wrote this in April but it is just as true now as it was then, even moreso...
Australia is Sleepwalking into a Recession
http://newworldorderwatchblog.blogspot.com.au/2015/04/australia-is-sleep...
Australia like Greece? Nope.
They are not locked into the Euro and ruled by Brussels.
Their own politicians are rubbishand totally corrupt - but that is hardly unusual for any country.
Correct Justuschickenshere, Aussie Politicians are no better or worse than the megalomaniacs that run any country.
Not being locked into the Euro means we can never be Greece, look to Italy, France and Spain to follow Greece.
Australia never had a notion of added value and it has been resources as usual. Tough luck followed by an over exposure to the two faltering trading partners. Japan is kaput and China´s increasing demand "for decades to come" stopped materializing already two years ago and now it is a hell long way down left before the rock bottom is hit after the frenzy. The two way economy, where resources brought a slump in other sectors shall inevitably backfire. There never was no regime, which had brain to comprehend the big picture.
I appreciate all the comments. I realize a lot of information here at ZH is good and a lot is bulshit. But even the bullshit I appreciate because it comes from the heart of people that have souls.
Don't worry Aus interest rates have a long way to go before their zero bound. Imagine property prices then with Glen Stevens acting all confused on why prices are even more insane'er!
Australians are politically inept of collectively making a stance to rebuke this......because most dont understand how the body politics function and in addition what is happening politically.
Just so long as there is new gadgets and shiny assets to impress others all else needs to be disregarded.
Spoken without forkin my tongue
(As an Australian)
Can pretty much say the same about us Americans. A dull lot that is highly impressed with shiny objects *squirrel!!*
Australia, since Robert Menzies, has been poorly managed. Back in the '60s Australia used to have very strong manufacturing sector, with companies like AWA, they used to manufaturer TVs, radios and a plethora of electronic goods. White goods used to be manufactured, and their was even an airplane manufacturing sector. Today, manufacturing is being massacred by the lazy policies of easy money by supporting the mining sector and the illusionary support of things tourism. Furthermore, Australia has gone to a service, or tertiary industry focus. Basically they believe by giving services to each other like, banking for healthcare, that the economy is able to advance. And that is the problem. There is no added value industry. Added value in Australia means, importing products from China and adding a ridiculously higher price to the good. It is a fair comment to say that Australia is the Greece of Asia, for it is.
What does it say of a country, like Australia, where you can buy citizenship. Yes for $5,000,000 Australian dollars (thats, only $US 3,500,000, and dropping fast), anybody with that kind of money can buy Australian citizenship, of course, all the most unscrupolous people from China, and every other dubious economic crook in the world are doing just that. Along with this insanity, Australia's blind eye to foreigners buying up property, especially by the Chinese, is so prevalent that now the median price for a Sydney home is $1,000,000 AUS. Eventhough the Australian Government has brought in tough new requirements on foreign ownership, nothing, as always will be done. Australia has painted itself into a very dark corner, if there is a housing correction, the entire economy will collapse, they WILL NOT do anything to jeopardize the property market, like raising interest rates, or going after foreign home buyers.
The underlying problem in Australia is that it has been incompetently managed. It matters not, Liberal or Labour Parties are in power, for they are both incompetent. And now that the mining boom is over, Australia is heading for the economic backwaters of the South Pacific. The AUS/US will head down 50 cents, and you will hear, as always, the economic nincompoops say that this is good for trade. If you look at a chart of the AUS/US dollar over the past 40 odd years (since it has been floated), you will see when ever the AUS dollar weakened, the Australian debt skyrocketed, as it is now. So how can a weak dollar help? It can't, it never does. What you really want is a strengthening dollar and people buying your goods, like it was for Germany and the Deutsche Mark.
Don't be fooled by the rosey picture Australians paint. Yes they have $60,000 AUS average salary, but that is only $40,000 US and the cost of living is one of the worst in the world, add house prices and rent, and that $60,000AUS wage barely will not cover your expenses. When a 2 bedroom unit, that is really a pig-sty, can cost you $2,500 a month, you are looking at 50% of your wage just to live like a rat (Sydney prices!).
The fundamental problem with Australia, is the same one with Greece, arrogance, incompetence, and incredible high opinion of themselves and absolutely no common sense or realistic undestanding of their low place in the world. And the last thing, and most important thing...they are incredibly rascist, that is the white anglo Australians. I hope as the immigrant population grows that eventually more of them will get into the Australian parliament, which right now is heavily biased to the anglo whites (alla South Africa in the bad ol' days).
Australia was once a lucky country, today its living on borrowed time. Like Greece, Australia is going to pay a huge price for its backward and foolish ways. Thanks to a long line of corrupt and incompetent Prime Ministers starting with Whitlam, Australia is now on a Greek trajectory. When you have a political class of the likes of Bronwyn Bishop, that treats the taxpayer as Emelda Marcos or Marie Antoinette did, you can only have one eventual outcome.
Like the US, Australia has a poor quality and corrupt political class. It matters not, Democrat or Republican in the US, Labour or Liberal Party in Australia, the outcomes are always the same, bad corrupt and incompetent government. I don't know what is worse, to have such people in government destroying countries, or that there are so many people in the electorate that keep voting for these thieves and morons, what does that say about the people who vote for this kind of government? Yes, you get the government you choose, but does everybody deserve them, especially those who want neither of these criminals? That's why people should be always allowed to leave and freely go to some other country, it puts pressure on the home country to get its act right, otherwise the good hard working people will be abused. Problem is, when nearly every single country in the world is run badly, and that there is a potential of 7,000,000 people to move around, this free movement of people can be very unbalancing.
So I ask all who have read this comment, what is wrong with democracy when we still get such bad governments? How can we fix democracy? Because, I for myself, am tired of these thieves and idiots. Something has to change.
>>>So I ask all who have read this comment, what is wrong with democracy when we still get such bad governments? How can we fix democracy? .... Something has to change.
A "mass democracy" is doomed, and quickly, due to the susceptibilty of large numbers of people to manipulation by clever self-interested individuals.
I believe that a representative ("republican") form of government can work, but only as long as the citizenry are virtuous enough, or analytic enough, to not choose representatives who promise what cannot be delivered. FWIW I believe that fractional reserve fiat banking rules out civic virtue over the long haul, and that woman suffrage largely rules out analytic thinking by a plurality of the electorate.
I agree that something indeed has to change, but for a "rich country" like Oz or the USA, change will be very unplesant.
Ah very good points, August. Its nice to hear from someone, once and a while, with a balanced view of the world, I complement you on your realism and balance. So in honour of your statement "mass democracy" is doomed, I would like to put forward an interesting proposal:
Under the arguments that a "mass democracy" is doomed, we come to the point that there are forces within democracy to undermine it. So I ask who should be allowed to participate in a Democracy? Should only national citizens only be allowed to vote? What of those vistors who work and live a nation and pay their taxes, shouldn't they too be allowed to work? And what of those who don't pay taxes but live off entirely off pensions and benefits, should they be allowed to vote?
So I advance a radical idea. Those people who pay taxes should only be allowed to vote, afterall, it is the person who pays taxes that is supporting the government, thus if you don't pay taxes, or don't pay taxes anymore, why should you have a say in the vote? Furthermore, why should anyone in the public service be allowed to vote also? Isn't that a conflict of interest? To vote for a government that is paying your wages?
August I agree, "mass democracy" is no good. So I've advanced a concept of how to select who should be allow to vote. What say all you?
I say, I think you might be considered a bit of a fascist. To follow your logic why not just say the votes of the wealthy should be worth more than the votes of those who earn less. In which case the people who are buying citizenship who you complain about are pretty much your prime demographic. Youre also suggesting soldiers who dont pay tax, along with public servants, pensioners and self funded retirees arent allowed to vote. Your premise that the only contribution people make to society is through taxation is fundamentally flawed. If you want to go about saying soldiers who have fought and sacrificed themselves and died for Australia, or indeed any country, have not contributed to society and dont deserve to vote then good luck with that! I dont mind fair and reasoned criticism of any country but this kind of willful stupidity undermines the credibility of any serious points you might be trying to make.
This type of shrill, alarmist garbage about Australia being the next Greece baffles me. It has a commodities based economy and a currency that reflects that; Greece has no commodities. If you havent been paying attention, most countries in the world are trying to devalue their currencies to become more comptetitive, indeed it is the strong US$ that is doing them the most harm at the moment. Australia doesnt have rife corruption and an entrenched habit of tax avoidance like Greece had/has and people arent retiring on full benefits at 50. Australia is no more or less racist than most other countries if you bother to look around. Every nationality has some other nationality they think they are superior to and every nation has an ignorant underclass of of moron who buy into that stupidity.
Ever read "Starship Troopers" by R. Heinlein?
I suspect that voting down is the only response you can make!
I suspect that voting down is the only response you can make!
Wow! Cold Pragmatism, so much Vitriol, lol.
Vitriol? To mean my commentary piece was caustic. I think Aussiekiwi, you are jealous! Yes I say jealous! But I better explain why, since your Australian and New Zealand background will not help you with appreciating honesty and the truth. My first paragraph praised Australia what it once was, when Robert Menzies was Prime Minister, but you missed that didn't you? How Australia once was a capable country. But obviously you can't accept that for it you did you would have to admit that today Australia has worsen. Jealous people are like that, they hide their jealousness by building up what is inferior to was really better.
You are jealous too that no doubt I have eloquently explained what is glaringly wrong today and the horrible real character that white anglo Ausralians are. This further alludes me to noting that you are obviously a white anglo Australian and so are jealous that I can write meaningfully and appropriately about Australia, that you, AusseKiwi, are so in ignorant of and where you are being shown up by what you white anglo Australians call, a wog.
In short Aussiekiwi, I don't know whether-or-not you are suffering from some from Dissociative Identity Disorder since you obviously see yourself as some kind of Australian disoriented New Zealander or vice versa, or your just a typical white anglo rascist illustrating all the typical ignorant dissillusional understanding of a NSW cockroach, in either case, your one-eyed screwy understanding of vitriol illustrates how clueless you are of what cold pragmatism means! Illustrating, also, you must be jealous of my better insight and understanding.
I would feel sorry for people like you, if there was a chance that ignorant, backward, white anglo racists like you know-nothings could change, but since you people don't even understand the meaning of vitriol and how to accordingly use the word, there is no point. For the greatest problem with stupid people is that stupid people are so stupid that they think they know better than than they do, and so they never think they need to change and thus are forever to stay stupid. So why feel sorry for people who are determined to stay stupid? I guess you are feeling jealous about that too. Don't worry, stay in Australia, Aussekiwi, there you feel comfortable that you are among geniuses like yourself. And you know what they say about geniuses don't you:
When you're in a room full of geniuses everybody else is a moron.
but be careful Aussikiwi, for Australians suffer from the other infliction:
When you're in a room full of morons, everybody is a genius...consider the white anglo part of Australia as a perfect example of this!
Maybe taxpayers-only can vote is a cool idea, maybe not. I'd have to think about it. I don't see how it could work however because absolutely everyone pays tax in most countries even if they are not obviously contributing via income tax. For example you buy something at the shop, sales tax or VAT. Fill up your car pay fuel tax. So everyone can say well I am a taxpayer.
Let me expand on my thought. I don't consider sales tax, called the GST or VAT in some countries to be a tax that people entitles them to vote. I am referring to income tax, the tax where you pay the most tax. Furthermore, I have also trouble in believing that those who work in the public service should be entitle to work, for they don't really pay tax either! People in the private sector pay taxes to support those in the public sector, so if a public sector employee pays tax, who is really paying his/her tax, they themselves, or the individuals in the private sector!
The way it can work is this, only private individuals who have no vested interest in getting money from the government, are REAL taxpayers, and therefore only they should be able to vote. Yes this means that Liberal people, that is the LEFT, will find it very difficult to socialize many things. And so it should be, since they are not paying for it. They have to make a convincing case to show the REAL taxpayer why we should pay for socialized services. Furthermore, this system has inbuilt safe guard for incompetent government. Badly managed governments will find it very difficult to spend money wastefully when the REAL people paying for it have word to how it should be spent.
So the question is:WHO SHOULD BE CONSIDERED THE REAL TAX PAYER?
I say, I think you might be considered a bit of a fascist. To follow your logic why not just say the votes of the wealthy should be worth more than the votes of those who earn less. In which case the people who are buying citizenship who you complain about are pretty much your prime demographic. Youre also suggesting soldiers who dont pay tax, along with public servants, pensioners and self funded retirees arent allowed to vote. Your premise that the only contribution people make to society is through taxation is fundamentally flawed. If you want to go about saying soldiers who have fought and sacrificed themselves and died for Australia, or indeed any country, have not contributed to society and dont deserve to vote then good luck with that! I dont mind fair and reasoned criticism of any country but this kind of willful stupidity undermines the credibility of any serious points you might be trying to make.
This type of shrill, alarmist garbage about Australia being the next Greece baffles me. It has a commodities based economy and a currency that reflects that; Greece has no commodities. If you havent been paying attention, most countries in the world are trying to devalue their currencies to become more comptetitive, indeed it is the strong US$ that is doing them the most harm at the moment. Australia doesnt have rife corruption and an entrenched habit of tax avoidance like Greece had/has and people arent retiring on full benefits at 50. Australia is no more or less racist than most other countries if you bother to look around. Every nationality has some other nationality they think they are superior to and every nation has an ignorant underclass of of moron who buy into that stupidity.
I say, I think you might be considered a bit of a fascist. To follow your logic why not just say the votes of the wealthy should be worth more than the votes of those who earn less. In which case the people who are buying citizenship who you complain about are pretty much your prime demographic. Youre also suggesting soldiers who dont pay tax, along with public servants, pensioners and self funded retirees arent allowed to vote. Your premise that the only contribution people make to society is through taxation is fundamentally flawed. If you want to go about saying soldiers who have fought and sacrificed themselves and died for Australia, or indeed any country, have not contributed to society and dont deserve to vote then good luck with that! I dont mind fair and reasoned criticism of any country but this kind of willful stupidity undermines the credibility of any serious points you might be trying to make.
This type of shrill, alarmist garbage about Australia being the next Greece baffles me. It has a commodities based economy and a currency that reflects that; Greece has no commodities. If you havent been paying attention, most countries in the world are trying to devalue their currencies to become more comptetitive, indeed it is the strong US$ that is doing them the most harm at the moment. Australia doesnt have rife corruption and an entrenched habit of tax avoidance like Greece had/has and people arent retiring on full benefits at 50. Australia is no more or less racist than most other countries if you bother to look around. Every nationality has some other nationality they think they are superior to and every nation has an ignorant underclass of of moron who buy into that stupidity.
Pragmatism is pragmatism, the temperature is irrelevant you imbecile.
lol, Cold Pragmatism, you are just raving now like all nutters, you have completely lost it.
By all means, dont let your vitriol get in the way of actual data.
http://hdr.undp.org/en/countries
http://www.oecdbetterlifeindex.org/#/11111111111
http://www.economist.com/news/21566430-where-be-born-2013-lottery-life
http://www.infoplease.com/toptens/mostlivablecountries.html
Wow! It just keeps getting better and better. First an uneducated Ausskiwi, and now Mr.Coffee pumping out statistical rubbish!
It is clear Mr.Coffee you are too much into the caffeine and you need some serious medcial help.
First of all, everyone of those indices are tabulated by using Government data from the respective nations. So you mean to tell me you believe that Australia's inflation rate is really less than 2%? I suppose you also believe when the racist Australian Government says they look after refugees very well, you believe them? How about, when the Australian governent appropriates land from farmers and homeowners and pay only the 50cents on the REAL market value as opposed to the fake market value they have on the books?
Mr. Coffee, you are a bean head. Your head is filled with beans and nothing else.
Governments all around the world lie about their statistical data. They have to lie, but apologists like you (I bet you work in the public service...) never look at facts. Go ahead pump out numbers from the OECD, you know the same organization that said that Greece (and many other countries) is a developing country and had growth all these years! Oh yes by all means read out that communistic rag, The Economist! That is truly illustrating your ignorance. And infoplease? You have go to be kidding me? What next Wikipedia? Oh brother, you Australians really are backward.
Have you not learned how to explore the Internet yet? You know there are places on the Internet where you can find REAL data! Try looking for them.
Or better yet, Mr. Coffee, how about, I know this is novel for you, try writing something from your own mind and experiences. Or is that too hard for you, are you too stupid too? You need somebody else to do everything for you, like all you socialists and communists?
So do this Mr. Coffee, learn what REAL DATA means, not the lies that are pumped out by government. Find INDEPENDENT organizations that give you data, the OECD is not independent, don't read communist rags, read balanced economic reports not those that have a vested self-interest, and lastly, infoplease is not a information resource!
Mr. Coffee, you are just proving my point about the white anglo Australians.
Oh one last thing, lay off the coffee Mr. Coffee, its affecting your ability to rational thought.
So far coldpragmatism all you have brought to the discussion is conjecture, insult and spite. Governments might inflate their figures to look good but why would other governments inflate Australian figures to look good? Your mindless unexamined arguments are as poorly structured as your insults. Your argument suggests that the rest of the world is complicit in making Australia look good? People such as yourself are impossible to have a rational discussion with because the circularity of your own thinking is so complete I wonder why you bother to enter into discussions at all instead of just listening to your own rhetoric. You seem to like to capitalise REAL DATA and INDEPENDENT organizations and yet you havent sited any data to back up anything you have said. I have my own business and travel around the world quite a bit and live half the year in Europe. I still maintain Australia is one of the best countries in the world to live in. You dont say where you live but you exhibit a level of animosity and bitterness that suggests more than a usual level of disgruntlement for an average citizen. Perhaps it is your lack of education or other personal disadvantage that leads you to troll the internet looking for attention which I guess must work for you. Your emotive comments and lack of well structured argument along with resorting to insult and unsupported conjecture suggest you allow bitterness and emotion to dictate your thinking rather than the rational premise you would like to think you espouse.
So far coldpragmatism all you have brought to the discussion is conjecture, insult and spite. Governments might inflate their figures to look good but why would other governments inflate Australian figures to look good? Your mindless unexamined arguments are as poorly structured as your insults. Your argument suggests that the rest of the world is complicit in making Australia look good? People such as yourself are impossible to have a rational discussion with because the circularity of your own thinking is so complete I wonder why you bother to enter into discussions at all instead of just listening to your own rhetoric. You seem to like to capitalise REAL DATA and INDEPENDENT organizations and yet you havent sited any data to back up anything you have said. I have my own business and travel around the world quite a bit and live half the year in Europe. I still maintain Australia is one of the best countries in the world to live in. You dont say where you live but you exhibit a level of animosity and bitterness that suggests more than a usual level of disgruntlement for an average citizen. Perhaps it is your lack of education or other personal disadvantage that leads you to troll the internet looking for attention which I guess must work for you. Your emotive comments and lack of well structured argument along with resorting to insult and unsupported conjecture suggest you allow bitterness and emotion to dictate your thinking rather than the rational premise you would like to think you espouse.
quote: "So I ask all who have read this comment, what is wrong with democracy when we still get such bad governments? How can we fix democracy? "
Democracy has nothing to do with your comments. You are clearly mentally ill. I should know, I used to write things like you. Go and ask a psychiatrist if you need medication, I suggest, based on your posts, that you do.
Nothing wrong with the australian goverment. We export our manufacturing, and our pollution. We study. We then export our intellect, and assist others with their pollution problems. We have no manufacturing. Fine. We need no manufacturing. The world is awash in manufacturing. There is massive excess, though you probably don't know this. Services, however, can be as finely honed as a shaving razor. Adjustable in days, weeks, months at the long stretch. Not years, like it takes manufacturing. Only a foolish country would make goods that it could import at a lower cost. If the country you import from has a shortage, well, prices solve everything. Another country would soon step up to the plate.
Good for you, mr bigot cold pragmatism. You are one of only a few racists, towards Australia, that I have met. Here, we are just trying to make a living and go on. We need no mansions, a scraping by standard of living might well not meet your extravagant needs, but certainly meets most of ours. After all, why spend time indoors, when we have the whole of Australia to explore, when not doing something worthwhile for the community. We also have fibre internet, you know. Feel warm inside, knowing you are right, and that this isn't the country for you. We don't need or want people like you. Any immigrant is a mate, you, however, are a fool.
15horses1donkey, ' Good for you, mr bigot cold pragmatism. You are one of only a few racists, towards Australia, that I have met. Here, we are just trying to make a living and go on.
Well said!!
"We have no manufacturing. Fine. We need no manufacturing."
You are fools who are completely dependent on countries like China who do.
"Any immigrant is a mate."
Spoken by a liberal fool who has not yet seen his culture, race, ethnicity and language destroyed by open borders and unchecked immigration.
They are utterly corrupt. The left come through the union movement and use it to enrich themselves. Virtually no one comes from private enterprise or the military i.e. no one runniing for PM has any record of achievement.
Well, here, you only have to walk 5 feet to get citizenship. And there is a water stop at the 2.5 foot mark.
These reprobates piled in against South Africans thirty years ago because they grew or mined the same sort of gear and wanted the market all to themselves. Stuff the Aussies.
All Australian housing loans are full recourse loans, you are liable to repay the full debt no matter what, unless you go bankrupt.
Banks lend to a certain criteria, loan value ratio, income/expense ratio. And most loans come with income insurance as mandatory. Income/employment is also proven before providing the loan, there are none of this sub-prime issues with Aussie banks. Increasingly the current generation are buying housing and living with parents since they cannot afford the loan repayments or as a way to accelerate repayment of loans.
The major issue with Australia's property market would come via unemployment, which would then see houses come on the market and then cause others to get out in anticipation of prices falling. However the RBA has room to keep cutting rates.
A recession will see the market collapse, though this is not a sub-prime situation. There are not 110% loans, or loans to people without sufficient income, or no income. (until they lose their job).
Nevertheless, those very highly priced properties will collapse, others not so much, followed by a decade of flat home prices....this exactly as happened in the last crash....late 1980s.
You are correct in saying that home loans in Australia are full recourse! But!
The full recourse aspect of home loans have always been the case. But that isn't the issue. The problem is the appraisal in the borrower. Banks in the past (like 20-30 years ago), would examine a borrowers ability to pay back the loan over the full period of mortgage. So if you take out a 25 year mortgage they would appraise you on your ability to pay for that period. That doesn't happen anymore, they appraise you on the interest term you have, 3 to 5 years. Furthermore, the appraiser would also take into account the average interest rate that could occur of the entire mortgage. That doesn't happen anymore.
So what do you have now? They check over the last few years what your income tax statements are, take into consideration only what the low value interest rate is now, and whatever collateral you can muster (including the home you are buying of course). So if interest rates are now say 3%, and you borrow 500,000 that is only 15,000 per year in interest, and you are focused only on what happens for the next 3 or so years. Is that natural?
Its easy to see how the banks are also contributing to higher home prices here. This is the BS that goes on in Australia. They bring in BS laws but they don't target the real problem.
Interest rates in Australia should closer to 10%, if that were to happen, you think the housing market will be at 1,000,000 AUS? NO, it wouldn't be.
This rubbish like full recourse home loans, is like all the utter clap-trap the Greeks did with their country. Never really focusing on the real issues, just papermacheing over the real problems, to keep the debt high going.
At least put it in context with the rest of the world. You do realise your on Zero Hedge right? Do you imagine the housing arguments are much different in many of the world capitals? Low and negative interest rates are pretty much global but having read a few of cold pragmatists comments I realize its a troll feeding frenzy here on ZH.
Also Australia does not have the Euro aka Greece. Its currency can fall in response to economic trouble.
We have that cunt Tony Abbott in charge here and Bronwyn Bishop travels short journeys in a helicopter for 5k a pop, all is not lost though, you can still buy a new 1 bedroom apartment in Blacktown (yes its full of extremely black people from South sudan BTW) for about 500K!
Oh Brother! Another racist Australian!
There are so many of you around on this site!
First all Equalizer, are you up with your history? Australia was settled by "extremely black people", as you put it, they are refered to as the Australian Aborigine, a very kind and inventive people you know. Now as you are referring to the South Sudanese people, they are of the same colour as the Aborigine you know. Anyway, I guess what you are referring to is the fact they are starting to populate Blacktown. Alas, I know Blacktown well. So what background are you, Italian, Greek or Lebanese? Ok stop there on this, read below, I have written enough about racists in previous comments.
But I would like to clarify one thing though for the many other readers. Why are so many "extremely black people" are being seen in places like Blacktown, and please no jokes about the association of the name of city? Because you see, the mining boom has gone bust! And because Australians, are very much like Greeks, they are lazy, have a high opinion of themselves that good hard work is too good for them, they decided to stay in the cities, and drink caffe lattes and stay in air conditioned offices. So when the mining companies went looking for hard workers, they found them in Africa, one place was Sudan. But now they are all out of work and heading for the cities, and running into these good for nothing lazy bums like Equalizer, who can not appreciate that the reason why he has a job is because these "extremely black people" where proping up the country with their backbreaking work in very difficult conditions in the middle of nowhere where the Sun whould bake any demon from hell into charcoal!
Equalizer, learn a little respect, and if you want cheap apartments, go live in Darwin, but you still have to live with the "extremely black people", but at least this time they are the indigenous kind, UNLIKE YOU!
Elsewhere in this thread you proposed allowing only taxpayers to vote and not public servants.
This means that pensioners, soldiers, refugees and indiginous Australians on welfare benefits would not be allowed to vote. Even someone with your limited mental faculty will understand this makes YOU a racist cold prag.
In a perfect world only net taxpayers should get to vote. For everyone else it creates a massive conflict of interest.
Way too many racists and haters on today
Cold, I am getting the very strong impression you are a garden variety Aussie hipster.
Are you?
Only if garden variety means full of manure and compost...
Yes nasty conservative government. You know cleaning up socialist mess every time they get in!
Remember Howards conservative government. Inherited a 96B debt from the previous labor government, paid it all off, paid up public service pensions - cashed up by 2007 after 11 years in government..
Howard loses the election in 2007 with debt to GDP ratio at 10%, money in the bank.
Next labor government arrives - and they run up a new 300b debt with our new debt to gdp at 28%.
Again conservatives get back in and guess what - another mess to clean up. No wonder so many on the left think he and hockey is a #unt. Some responsible people back in the government.
How many irresponsible children call their parents nasty names because they havent learnt to be responsible.
Yes if we put the labor government in, they runaway with the credit card and spend it up big time on all the social programs.
That is the road to Greece.
Best keep the conservatives in - even if it is Tony Abbott. Ill vote for him, because the altenative has been shown to be so much worse.
Already on it my friend and loving these prices
Already on it my friend and loving these prices
Bottom line? They've run out of other people's money.
M Thatcher
Icarus
Name me the handfull of countries this isnt true for.
What a croc. Great spin story. A$ one of the most heavily traded currency in the world for specs to play with.
Australia is nothing like Greece. Government Debt to GDP at 28%. Before the GFC it was 10%.
In Australia all minerals in the ground are owned by the state governments.
Gold mining companies mine the gold and pay royalties to the state government.
Known gold reserves in Australia are over 10,000 tons.
Thats before we start on every other mineral and resource.
Australia is already one of the wealthiest countries in the world, and will continue to be.
I'm 25. Can't I just wait until the old slimy fucks die? Surely once they're all out they'll be replaced with (hopefully) more realistic people...