OK, I changed my Super to a cash fund at 5000. I reckon that the ASX might get down to 4000 the way it's dropping right now. At that point, I might change it to Shares.

Starting to look like a W now, but I'd expect we'll get back on track by the end of the year. I'd also expect a few more see-saws yet.  

Wild fluctuations around September. You read it here first.

what an excellent thread. good on you.
the mainstream media here, like everywhere I suppose, isn't really across what is happening in the gfc and aftermath, and when they do get across it, they are six months behind the news, very typically, the ABC, but all of the news outlets really. But hey, let's face it, they report after the fact, not ahead, so no big deal.

There are some very good sources of info on the net, collated news and analysis, and commentary sites about this, and I don't want to sound negative or alarmist about this, but this talk of a double-dip global recession has been around on those sites since last year, and the commentary isn't pretty.

Have you heard about that stuff? There is quite dire talk really about the future of the U.S. dollar and treasury bonds, etc, etc, etc, which is scary to say the least.
What do you think?
Good thread. Potentially very very useful in an Australian context, because we are getting very little information here, none really, about what will happen to Australia if there is another crash.

Yes, the media have been very subdued about it all. Double dip recession? What Double dip recession?

Of course the reality is that we're almost there.  

---

"double dip recession" is a bit of a misnomer that we are being fed as well. There could well be another full on collapse to make the gfc look like a picnic - and that's not something I came up with, it is a subject of almost unanimous consensus out there on the net, by informed, non-mainstream media analysts. I know they can be on the alarmist side so they can push their own barrow sometimes, but the view is just too uniform right across the spectrum, that you have to give it serious consideration. The Americans are up the creek without a paddle apparently, they are so deep in debt (the economy that is), that many are saying they simply can't get out of it. Ordinary commentary in the blogosphere over there as well is getting increasingly polarised and full-on hostile between the opposing sides. According to a large proportion of commentators, Obama and the Democrats are tantamount to communists and are to blame for everything that is going wrong.
God knows what they would think of the Australian labor party!?

nice chart.
Here's a reliable one - the U.S. dollar index - looks like the greenback is about to go for a roller coaster ride. This is scary stuff:

http://www.bloomberg.com/apps/quote?ticker=DXY%3AIND

That chart is more reliable than a weather forecast.

Most of them would have preferred Rudd's stimulus package to Obama's.

Unemployment benefits are limited in the US, and it doesn't look like Obama will extend the maximum term. There are a lot of angry hungry, homeless people and the situation looks set to deteriorate further.

"Most of them would have preferred Rudd's stimulus package to Obama's."
Well, probably, considering they needed it more than we did; now we have a good old massive deficit just like the yanks do. Great. When does the inflation start here then? It will in the States, that's the only way they're gonna have any hope of devaluing their debt.

"looks set to deteriorate further" - yes, but that's an understatement if ever I heard one. The way things are sounding over there, they'll end up fighting one another. You know how the American government tries to get around their deficit problem? They print money, full time.
When you see that sort of caper being used by governments, you are in big strife.
It doesn't happen in Australia yet; and if they tell you they're going to do it because it will stimulate the economy or something like that - it's crap, doesn't matter whether it is labor or liberal saying it. It isn't good. Lucky we still have iron ore and coal to sell (and tax) in this country so they can fund their deficits rather than the print money caper - or come to you and tax your house or your television or something. (that's the sort of thing they do in countries that don't have natural resources. Make sure they don't drive them offshore, or you'll be paying instead. You can't spend more than you earn, or you will have to get it off someone else. Simple; eternal and true.)

"There are a lot of angry hungry, homeless people..." (in the U.S.)

Yes, and there's a lot of people there who think that if you are in that situation it is your own fault.
That's what's good about living in Australia, to my way of thinking, Australians of whatever political persuasion, liberal or labor, tend *not*, for the great part, to think like that.
So when people here, think that liberals are all really right wing, I find it laughable. If you want right wing, go have a look at how you get treated in America; and thank your stars you don't live there - no matter what political party is in power in Australia.

I hate to be a harbinger of gloom and doom. Basically the poster who said that the stimulus packages did no good, was correct. If anything, they made matters worse by increasing national debt.

It might have swept it under the carpet temporarily, but that's about it.

The US Dollar on a roller coaster ride ? That means buy Gold. The Gold price will  continue to rise as a result.

All the ingredients are there for another plunge. The US Labour market is looking dismal, nobody has actually done much about the causes of the last crash. They just tried to treat the symptoms with stimulus packages.

Then there is the impending phosphate crunch.  What happens when we can't meet fertiliser demands with 7 Billion people on this Earth?

Then there's Peak Oil..... and Climate Change, but that comes later.

It's enough to drive you to religion. Fortunately I'm a Buddhist today so at least I realise that there is no self, and nothing that belongs to that self. It's just a false understanding of a selfish mind ;)

So what have we got to lose?

---

yes, the gold price is like a thermometer up the bum of your pet dog isn't it.
Problem about gold is that it's quoted in U.S. dollars. As the Aussie dollar goes up the price of gold in Aussies goes down. Very exciting buying gold from Australia.

muso - some of my friends and myself were bitterley disappointed by the GFC.

we had got all cashed up, ready to benefit from those who were over indebted.
but it never happened !!!!!!!
No houses sold for $50K, 3 year old cars for $200

what a swizz

Sprintcyclist wrote on Jul 1^st, 2010 at 3:55pm:

muso - some of my friends and myself were bitterley disappointed by the GFC. we had got all cashed up, ready to benefit from those who were over indebted. but it never happened !!!!!!! No houses sold for $50K, 3 year old cars for $200 what a swizz

Want some cheap shares in Brisconnections?  :P

hahhah, i saved one of my mates a packet on those.

advised him to sell out at the loss he already had, he did.

The only reason I haven't bought into shares again is because I haven't had time. Still seriously considering it though.

It's pretty widely recognised the stimulus package saved Australia from going into recession and kept the unemployement rate from going down. Yes it used up the government's surplus, but you must consider what there tax receipts would be like if we went into recession. Ie we would end up in deficit anyway.

Regarding shares, if your worried enough to sell them all then you will also miss out when they go up again.  

http://www.lewrockwell.com/celente/celente38.1.html

it's not so much the spending of the surplus that is the problem, it is the massive unfunded deficits they have run up that cause inflation down the track.Higher interest rates = higher mortgage interest rates.
higher mortgage interest rates = higher forced home sales and bankruptices of ordinary people.

Our government debt is not massive at all. It's tiny compared to most Western countries. It's not likely to have any discernable effect on interest rates either. Actually I would be more worried if interest rates were stll low. It would be a sign that the economy is weak and the Reserve Bank is still trying to stimulate it.

"debt not massive at all. tiny in comparison to other western countries".

typical example of left-wing economics: "hey, we're not the worst debt in the world".
I have never heard in my life a left-wing view of economics which says basically that a deficit is *ever* massive.
We shouldn't bloody well have *any* deficit in this country. Labor was left with a huuuge surplus, and blew it within a year and then racked up a debt which is worse than the Whitlam government's.
Government debt = inflation = higher interest rates (in a little while) = higher mortgage defaults.

Do labor voters actually understand that when there are "higher interest rates", that also means "higher mortgage rates" - *house* mortgage rates, and others. Higher interest rates just isn't for the comfies who have some money in the bank - unlike the Australian government apparently.

I like governments who actually know how to stop spending money so they don't cause inflation which in turn protects the spending power of our money, and stops house prices going up.
Do labor politicians actually have any idea of these concepts?

or do they conveniently redefine them?

]"debt not massive at all. tiny in comparison to other western countries".

typical example of left-wing economics: "hey, we're not the worst debt in the world".
I have never heard in my life a left-wing view of economics which says basically that a deficit is *ever* massive.
We shouldn't bloody well have *any* deficit in this country. Labor was left with a huuuge surplus, and blew it within a year and then racked up a debt which is worse than the Whitlam government's.

There on target to balance the budget in a couple of years. Do you think this would be the case if they let the economy go into reccession?

Government debt = inflation = higher interest rates (in a little while) = higher mortgage defaults.

That's the simplistic line that that Howard tried in the last election. Government debt is only a factor in interest rates. Look at the US for instance. Their government debt dwarfs ours yet their interest rates are near zero!

Do labor voters actually understand that when there are "higher interest rates", that also means "higher mortgage rates" - *house* mortgage rates, and others. Higher interest rates just isn't for the comfies who have some money in the bank - unlike the Australian government apparently.

You have touched on the real debt problem - ie consumer or personal debt which has grown out of control (thanks to the excessive and wasteful property boom encouraged by the last conservatve government).

I like governments who actually know how to stop spending money so they don't cause inflation which in turn protects the spending power of our money, and stops house prices going up.
Do labor politicians actually have any idea of these concepts?[/quote]

House prices are too high, it wouldn't be a bad thing if they came down or at least stagnated.

there wouldn't have been a recession here anyway.

"That's the simplistic line that that Howard tried in the last election. Government debt is only a factor in interest rates. Look at the US for instance. Their government debt dwarfs ours yet their interest rates are near zero! "

excellent example of redefinition. Nothing to do with Howard, it's a basic economic tenet: government spending causes inflation, big government spending causes big inflation, interest rates are a casualty of that. There is no way U.S. interest rates will stay low in the medium term, try as they might to keep them down. The government spending / inflation spiral doesn't happen overnight. Just like the Whitlam years here, the inflation started to ramp up years after, it doesn't happen tomorrow.

Inflation encourages people to invest in real estate, not conservative governments, or any government for that matter on the basis of their political persuasion, only on their fiscal management skills or lack there. Property is one of the only assets that can keep up with inflation, that's why people invest in it. Governments that spend up big cause inflation which causes people to invest in real estate which causes the price of housing to go up fast and a lot. Labor governments are invariably the profligate spenders, just like this one - that is what causes inflation and increasing property prices. Blame labor.

did you know that in terms of gold, a barrel of oil costs about the same now as it did fifty years ago, or more?
It only costs more in terms of the bullsh*t fiat (paper) currencies that governments have brought in so they can go into big deficits, and inflate the currency to devalue that debt (and the spending power of your savings).
Governments can't print gold, and can't get any more than what they've got, so they don't like that as a currency - they love paper money because they can spend whatever they want without consequences to themselves (a bit like a government credit card that everyone else has to pay off). The consequences of governments spending on credit is inflation - the consequences of that are that the government debt is devalued along with your money. That's why it costs you a lot more today for a barrel oil (or a litre at the garage), that it did fifty years ago.

Australian currency used to be not just backed by gold, it *was* gold. You've probably heard of Australian gold sovereigns.
Governments around the world abolished gold currency early in the last century so their spending would not be restricted.
Inflation has been the curse of these economies ever since. Now you have the luxury of working all your life and see any savings you have not only taxed to the hilt by governments, but also devalued by inflation.
You are an economic slave to governments as well as corporations in that situation.
The only thing the ordinary person can really do is buy property - hey, then the government wants to tax any capital gains you make on your risk.
Both sides of politics does this sort of thing, labor does it even more.

Quote:

Starting to look like a W now, but I'd expect we'll get back on track by the end of the year. I'd also expect a few more see-saws yet.   Wild fluctuations around September. You read it here first.

Jeez, check out the soothsayers with the big brains  ::)
Next they'll be prediciting lots of "V's" within a graph. ..And if you put two of those "V's" together, you get a "W" ..OMG  :o ..how creepy.

So why didn't they tell us earlier that there was going to be a large volcano eruption?
Why didn't they tell us earlier of Rudd's thoughts on a large mining tax?
..Or the European debt crisis that everybody should've known about in the frist place? ..and etc. etc.

Wherever there is a Lemony Snicket, there will always be "V's" and "W's" within a graph. But zoom out far enough, and you'll see a straight line heading upwards.
What's the angle of that line? 42 degrees would be my guess.   :D

who do you mean by "they". "they" did tell us, at least some did, over years before and right up to; and they're still saying it.
You don't hear it on mainstream ABC media in Australia though. They are about six months behind being aware of current commentary. If you rely on the Australian media, you will be left at the back of the queue.

Quote:

who do you mean by "they".

"They" are one third of "Them" and "Those" who have different predictions.

they're the ones - that third. Yes.
Now, go on, don't ask me where to find what they're saying will you.
Because we know everything in Australia, don't we.

Did you know that in the last quarter, one of the biggest exports from Australia was gold?
Surprising that, isn't it.
Mind you, the Australian labor government doesn't buy any, and the libs sold all ours fifteen years ago. Oh well, just as well all those sovereign wealth funds around the world can't get enough of it, you know, India, China, Russia, all those sorts of places.
Never mind, we'll be right here eh.
Don't you think so? Yes? No? Oh, what the f^k, where's my beer.

you did know, didn't you, that Australia is one of the biggest gold producers in the world - has been since the 1800s, but the Australian government is way down on the list of countries that have national gold reserves in the kitty? We sold most of ours in the mid 90s because of an international agreement among the world's gold producing countries to do that, led by America, which didn't end up selling their gold anyway.

Gold, red and black - that should be the real colours of the Australian flag - gold for gold, red for iron ore and black for coal.
That's why we don't have to worry too much about global financial crises.

Jee, I wish the government would buy some. Nah, hey, tax them instead I suppose that's how they think.

will we ever get better than backwater hicks for a government in this country? (Rhetorical. I'm not sure I want to hear the answer to that.)

Yes I've chastised Johnny over and over for selling our gold reserves for a song. But I admit that I was being a bit disingenuous there, because our gold reserves really add up to a minor amount of our nation's total wealth. And we have lots more gold still sitting there in the ground.

I also chastised Johnny for skimping on our infrastructure, and that's where I think our real wealth lies.
You can do lots more with a thriving city than you can do with a lump of gold. So in effect, I agree that the lump of gold is a minor priority when compared to a thriving city.
But if you sell that lump of gold, which has proven to have increased significantly in value, without significantly improving the infrastructure upon it's proceeds, then you must really consider Johnny as being nothing more than a total economic moron.

Maybe there's some other economic angle that I haven't taken into account there, but I can see a lot of wasted profits for our country at the hands of one J.W.Howard.

yes, god only knows what Howard and Costello did with the money from the gold sale. I reckon they probably just kept it in the bank and that's what accounted for that great big surplus they had when a majority of the Australian electorate kicked them out of government. Can't have surpluses, you know, means they aren't doing anything probably.
Never mind, good old labor has come along and given that surplus the flick quick smart, eh. Not only that, they've given them the finger too, by running up a great big deficit.  That'll teach them.
Only thing is that labor could have used that gold to sell and wipe out the deficit, just to give them another finger, but hey, you can't have everything can you. Anyway, they can tax the crap out of them instead to get rid of the deficit, and if they can't get the companies, well, they can always come after little b*st*rds, that can't do anything about it anyway. Ha ha ha. That'll teach them to make a profit - capitalist b*stards. .
All that, and they didn't have to do the infrastructure thing either.
s*ht it's good being a labor supporter.

and we'll look real good too, if we get the gold mines to stop digging all that gold up and leave it in the ground, then we'll get all the voters back who've gone over to the greens. Bl*ody idiots!

muso wrote on Jul 1^st, 2010 at 3:37pm:

I hate to be a harbinger of gloom and doom. Basically the poster who said that the stimulus packages did no good, was correct. If anything, they made matters worse by increasing national debt. It might have swept it under the carpet temporarily, but that's about it. The US Dollar on a roller coaster ride ? That means buy Gold. The Gold price will  continue to rise as a result. All the ingredients are there for another plunge. The US Labour market is looking dismal, nobody has actually done much about the causes of the last crash. They just tried to treat the symptoms with stimulus packages. Then there is the impending phosphate crunch.  What happens when we can't meet fertiliser demands with 7 Billion people on this Earth? Then there's Peak Oil..... and Climate Change, but that comes later. It's enough to drive you to religion. Fortunately I'm a Buddhist today so at least I realise that there is no self, and nothing that belongs to that self. It's just a false understanding of a selfish mind ;) So what have we got to lose?

What do we have to lose?

Hmmm???

http://stockcharts.com/charts/historical/images/djia19201940s.png

No two era's are ever exactly the same, in terms of the inputs that go into the making of the era's, but some of the outcomes can have some similarities!

That said, I agree with many of the points you have made!

muso wrote on Jul 1^st, 2010 at 11:22am:

OK, I changed my Super to a cash fund at 5000. I reckon that the ASX might get down to 4000 the way it's dropping right now. At that point, I might change it to Shares. Starting to look like a W now, but I'd expect we'll get back on track by the end of the year. I'd also expect a few more see-saws yet.   Wild fluctuations around September. You read it here first.

I run our own DIY super fund.

Given my views on likely events, we converted into 100% CASH in 2006. We have not since re-entered the markets and nor will we be re-entering the share markets, in the forseeable future.

This means we missed out on the 2009 recovery, but it also meant that we didn't get hit with the crash following 2007.

On balance, we are reasonable well placed, particularly if the markets re-test their March 2009 lows, as I suspect they may.

Quote:

yes, god only knows what Howard and Costello did with the money from the gold sale. I reckon they probably just kept it in the bank and that's what accounted for that great big surplus they had when a majority of the Australian electorate kicked them out of government. Can't have surpluses, you know, means they aren't doing anything probably. Never mind, good old labor has come along and given that surplus the flick quick smart, eh. Not only that, they've given them the finger too, by running up a great big deficit.  That'll teach them. Only thing is that labor could have used that gold to sell and wipe out the deficit, just to give them another finger, but hey, you can't have everything can you. Anyway, they can tax the crap out of them instead to get rid of the deficit, and if they can't get the companies, well, they can always come after little b*st*rds, that can't do anything about it anyway. Ha ha ha. That'll teach them to make a profit - capitalist b*stards. . All that, and they didn't have to do the infrastructure thing either. s*ht it's good being a labor supporter. and we'll look real good too, if we get the gold mines to stop digging all that gold up and leave it in the ground, then we'll get all the voters back who've gone over to the greens. Bl*ody idiots!

I know there's probably no changing your POV there. But you might look to the "foreign debt" as a real indicator, considering the liberal government's (even worse) policy of privatisation.
The private debt far outweighed any government debt. And don't forget that they just shuffled the figures to display some government profit.
And don't forget that the libs ended up in a heap of crap even before the onset of any challenge for a government.
Don't you remember them crowing about getting us through the Asian financial crisis when the credit crunch was merely on the horizon?
They wanted out pal. They didn't want to deal with the fruits of their mismanagement.
The Asian crisis was absolutely nothing compared to waht we are still experiencing because of useless right-winged mismanagement.
Do you think that the libs (conservatives) would've spent money during the crisis or tightened the belt even more?
I know what they would've done, you do too.
Work even harder, work even longer, for less pay would've been their adnauseum solution. How wrong they would've been. We would be absolutely stuffed with that policy and you know it.

No, I don't *know it*.
From what I can see everyone is working the same now as they were before, and the stupid $900 stimulus cheque that they sent out did b*gr all, except put the government into more debt.

No, I don't remember them saying we were through the financial crisis at all. I do remember Costello saying that there was a financial tsunami coming though. Surely you remember that.

When the inflation starts and mortgage interest rates start going through the roof (there was a demonstration outside the Reserve Bank in Sydney last week by distressed homeowners), there is labor to blame for pushing up government spending which will cause it.
If the libs win the next election though, you will have the convenience of blaming them though because they are the ones that will be there when this hits the fan - and - you don't like them no matter what they do.
Luckily, your end of politics doesn't decide the election outcome. The middle voters do. Thank god.