A new meaning of 'Going Greek'

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We are on nothing like a Greek trajectory. We actually have some products the world wants (unlike greece) so we have some income.

What we really need of course is to shift away from a growth economy to a steady state. Growth based economies are the biggest economic myth of all time. They are fundamentally unstable and rely on constant overconsumption and population growth to feed them. There are zero differences between a growth economy and a ponzi scheme.

Shifting away from growth would allow us to stabilise, even out inequality and would actually increase the standard of living for most people.

Peace, love and mung beans dude.
 
holy shit, the irony of this article is how Norway came to be in the position that it is. By taxing the **** out of it's resources. "Axe the Tax" indeed.
 
Indeed LS. They had the foresight (and cahones) to tax miners appropriately and to put that money into a sovereign wealth fund to benefit everyone rather than pissing it away on personal tax cuts for the middle class. Thanks Howard (and Rudd, and Gillard and Abbot...)
 
I'm no financial whizz, but I know a good metaphor when I see one.
 
The thing that really shits me about the whole property thing at the moment is how peopel are beign misled into thinking that higher property prices are a good thing. They aren't Not for 99% of us anyway.

Sure. Your house is worth more in dollar terms. But in relative terms, its still worth one house.All inflated prices do is make it harder to get a house and much harder to upgrade. Think about it - if a 2br house is worth 200K and a 3br is 50% more (ie: 300K) then its a 100K cost to upgrade when you you need to. If your 2br house is worth 600K and the 3br is still 50% more, then the cost to upgrade is 300K. The relative values stay the same but the higher startying price makes the final number much larger.

A house used to be worth about 2x income. If your income was 5k/year (back in the 50s) your house would be 10K. Now an average income is somewhere around 50k but an average house is somewhere around 500K. That's now 10:1. So to pay it back in the same 25 year mortgage takes a much larger chunk of your income than it used to.

OK... if you were able to cash out your asset, high prices are good. But for houses we can't - where would we live? We could rent but landlords need to pay for their inflated mortgages as well so rent is expensive.

The only people who benefit are those that invest in property and can therefore realise the value of the asset. They love property bubbles. For those of us who have houses to live in, its crap.

Cheers
Dave
 
Had this at a greek restaurant once. Standard euro lager. Great name hard not to giggle when you order one.
Vergina-Beer-bottle-330ml.png
 
Airgead said:
The thing that really shits me about the whole property thing at the moment is how peopel are beign misled into thinking that higher property prices are a good thing. They aren't Not for 99% of us anyway.

Sure. Your house is worth more in dollar terms. But in relative terms, its still worth one house.All inflated prices do is make it harder to get a house and much harder to upgrade. Think about it - if a 2br house is worth 200K and a 3br is 50% more (ie: 300K) then its a 100K cost to upgrade when you you need to. If your 2br house is worth 600K and the 3br is still 50% more, then the cost to upgrade is 300K. The relative values stay the same but the higher startying price makes the final number much larger.

A house used to be worth about 2x income. If your income was 5k/year (back in the 50s) your house would be 10K. Now an average income is somewhere around 50k but an average house is somewhere around 500K. That's now 10:1. So to pay it back in the same 25 year mortgage takes a much larger chunk of your income than it used to.

OK... if you were able to cash out your asset, high prices are good. But for houses we can't - where would we live? We could rent but landlords need to pay for their inflated mortgages as well so rent is expensive.

The only people who benefit are those that invest in property and can therefore realise the value of the asset. They love property bubbles. For those of us who have houses to live in, its crap.

Cheers
Dave
The population in the 50s was almost a third of what it is today, yet we all still need to commute to basically the same areas. If we insist on living on / doing business from the coastlines of Australia, 20:1 ratios may well be on the horizon.
Plus the fact that folk in the 50s didn't have the endless drains with which to piss away their disposable income with.
'Can I interrupt your Sportsbet as I update your i phone whilst installing your Foxtell with platinum package sir? Oh good, and yes, we take visa. Credit account? why certainly sir'
 
That is true... hence the need to get away from a growth based economy. 20:1 is only on the horizon because of growth. Shift to steady state with a steady population and things start to look very different.

And this is also the big irony... we complain about cost of living, but a large part of it is really discretionary. Your inflated mortgage takes a huge chunk already. Why spend huge $ on discretionary stuff and pretend that its all vital? Is foxtel a necessity? Is that flash new phone necessary? Or can I keep my old handset and switch to a much cheaper plan? That second big tv? That new bigger TV than the one you bought last year?

Consumerism is the pits. We become our own worst enemies.
 
I came here in 1977,just came for a holiday but stayed here, early 1978 bought a house in Yarraville, bought there because the premier at the time said as soon as the West Gate Bridge is finished house prices will go up in the Western Suburbs. A double fronted solid brick Californian Bungalow cost me $25,000, wages on construction at the time $1000/ week, take home was around $630-$650 ratio of house purchase to wages meant I could pay off the house in a year, best thing since sliced bread, kept on buying houses next was a Victorian terraced cottage cottage up for private sale for $15,000 offered $10,000 sold! 1982 earning in excess of $2000 /week take home around $950, kept buying houses.
Today that would be near impossible to do the ratio between wages and house prices is way to much,in fact it is hard to see how young couples can afford a house and pay it off before they retire, if we are in a bubble and we lose the Chinese buyers causing the bubble to burst the only houses I can see dropping in price are the $1 million plus which is what the Chinese have been buying.
 
Terry Mccrann's inability to grasp the basic fundamentals of the monetry process makes my head hurt. Mccrann's incompetence aside, there is a debt problem in Australia. As alluded to by previous posters, the level of private domestic debt is a real concern.
 
goomboogo said:
Terry Mccrann's inability to grasp the basic fundamentals of the monetry process makes my head hurt. Mccrann's incompetence aside, there is a debt problem in Australia. As alluded to by previous posters, the level of private domestic debt is a real concern.
Indeed... that's the real problem. Government debt is a non issue. Its private debt that's a huge problem (mostly in the form of mortgages). And yet, the whole modern growth economy relies on private debt to function and we are all encouraged to stop saving and spend more to help the economy. Crazy.

BTW - The Chinese actually have a tiny impact on property prices. They are highly visible and easily picked on but actually a tiny part of the market. Its local speculators that drive most of it.

Cheers
Dave
 
malt & barley blues said:
I came here in 1977,just came for a holiday but stayed here, early 1978 bought a house in Yarraville, bought there because the premier at the time said as soon as the West Gate Bridge is finished house prices will go up in the Western Suburbs. A double fronted solid brick Californian Bungalow cost me $25,000, wages on construction at the time $1000/ week, take home was around $630-$650 ratio of house purchase to wages meant I could pay off the house in a year, best thing since sliced bread, kept on buying houses next was a Victorian terraced cottage cottage up for private sale for $15,000 offered $10,000 sold! 1982 earning in excess of $2000 /week take home around $950, kept buying houses.
Today that would be near impossible to do the ratio between wages and house prices is way to much,in fact it is hard to see how young couples can afford a house and pay it off before they retire, if we are in a bubble and we lose the Chinese buyers causing the bubble to burst the only houses I can see dropping in price are the $1 million plus which is what the Chinese have been buying.
The average wage in 1978 was about $215 per week and in 1982 was about $330 so you were on 5 or 6 times the average weekly wage. Pretty good money.

I reckon if you were earning 5-6 times the average wage today, you shouldn't have much trouble buying a house.

Comparing it to todays $1400 means you would be earning $7000- $8000 per week, nearly $400000 per year.

Na, I couldn't take the pay cut. :unsure:
 
Yes it was good money but if one was prepared to chase it and put the hours in then it was achievable, I left Singapore where I was doing maintenance on the oil rigs that was $1000 US dollars a week, the only reason I came to Australia was to see how it was down under before striking back to the UK.
When I arrived in Australia I took a job straight away taking milk bottles off the line and putting them in the crates, that was $250 a week, after 2 weeks the immigration was after me, so I thought I would get a job in my trade at a knitting mill in Port Melbourne and argue the case that I was in a trade which they were looking for skilled trades men to fill. They still wanted me out of the country, left and got a job with Allens sweets in Port Melbourne and from there into construction building the Newport Power station which the Union said would never get built. Putting in the hours 7 days a week plus funny money I was able to knock up the $1000 /week
1982 I was working at Moomba not for Santos but for a construction company at that time it was 4 weeks on and one week off still working 7 days a week a minimum of 12 hrs a day, I was brought back from my 1 week off throwing me off my shift which meant the company had to pay extra because I wasn't on my normal shift.
I wish those days were back $20 was a lot to spend on groceries for a week for two people even when I was living in Melbourne working at the power station after a Saturday night out I was still afraid to look in my wallet until Sunday night :)
Remember the ads for Great Keppel Island, Get wrecked on Great Keppel I was going there for a holiday and a house I wanted was going up for auction while I was away I made an offer of $6000 which they turned down, it had rising damp which I could fix using a method they used in the UK.
When I got back the house had sold at auction for $4,000, they really were the good old days
The immigration dept used to have amnesties every 6 months or so. That's how I got my permanent residence visa
 
I hope you sit on the compassionate side of the whole boatpeople/illegal immigrant/asylum seeker issue.
 
Cool story Hansel, but I'm still struggling to accept that a "tradie" could earn that kind of money back then.
 
No story, all perfectly true, as I said put in the work and the hours and the money was there, had it not been I would have been straight back to Singapore, I had a air ticket valid for a year and I must admit the first year was the hardest, I did hate it here for that length of time, my first digs was at the top of Elizabeth Street just around the corner from Vic market the place was full of down and outs when I asked for a room I was told all they had was a Bungalow $7.00 /night couldn't believe my luck, but a Bungalow is not what I was expecting, a freezing cold room with a single bed a wardrobe and a chair.
 
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