For the record I know a few who went through great misery at the time but who, financially, were ultimately made by that recession. They wouldn't likely have achieved what they have without it for various reasons.Thirty years ago when inflation was around 9%, the cash rate hit 18% and the Australian economy nosedived into recession the people were told that it was "the recession we had to have" with no apology or free money.
People suffered, went without, the economy eventually recovered, and we just got on with it. But we were a much tougher bunch back then.
She and I were in that period of the "recession we had to have".Both Labor and the Liberals throw money at any hardship these days. Both are populist big spending parties. Thirty years ago when inflation was around 9%, the cash rate hit 18% and the Australian economy nosedived into recession the people were told that it was "the recession we had to have" with no apology or free money.
People suffered, went without, the economy eventually recovered, and we just got on with it. But we were a much tougher bunch back then. No smashed avo on toast could be found at any cafe, nor soy lattes. Now suffering and going without is being able to afford only a unit instead of a house, or perhaps a cheap house instead of a McMansion.
I worry about where all this economic mollycoddling will lead us long term. It can't be good.
I am. I'm sitting on a shiteload of cash trying to score a holiday place for peanuts off some self-declared property investing genius that's levered himself up to the hilt and is now hundreds of thousands underwater because housing does not, contrary to popular belief, always go up.I am hoping this experience does not occur again as this current generation would surely starve.
I am. I'm sitting on a shiteload of cash trying to score a holiday place for peanuts off some self-declared property investing genius that's levered himself up to the hilt and is now hundreds of thousands underwater because housing does not, contrary to popular belief, always go up.
Bring on the slaughter.
Nice. There's plenty of v8 utes, jet ski's etc getting firesaled at the moment too.beat you , have snapped up my bolt hole
probably not exactly peanuts , but money is losing buying power every day
my seller was just 90+ and talked into moving to a retirement village ( by his family )
Bloombergs have put the above problem into "real" figures."Every major news outlet, plus Yellen, the IMF, WDB and even Jamie Dimon representing the bigs banks are saying what a catastrophe a debt default may mean, if the do not raise the debt ceiling by June 1, so obviously what really happens is somewhat less than that.
Figures of 31 trillion dollars have been wafted around like real money.
Not all of the trillions are due by June 1st, there are some that are ten years or more into the future.
But if the US congress fiddles while Rome is burning, a crisis could arise before the June deadline.
Treasury is the body that manages the inflows and outflows of the dollars, but the outflows and inflows go up and down like most business overdrafts.
it could happen that if there are some big outflows for wages, interest repayments, bribes to third world dictatorships etc take the treasury to the limit well before June 1, default will come sooner rather than later.
Whether gov employees wages are not paid pending some more tax inflows, or default on interest payments arise first is an interesting discussion point.
Mick
Mick"The U.S. Treasury Department said in a statement Friday that it had just $88 billion of extraordinary measures to help keep the government’s bills paid as of May 10.
That’s down from around $110 billion a week earlier and that means that just over a quarter of the $333 billion of authorized measures are still available to keep the U.S. government from running out of borrowing room under the statutory debt limit."
MrC Ash is still the Kingbeat you , have snapped up my bolt hole
probably not exactly peanuts , but money is losing buying power every day
my seller was just 90+ and talked into moving to a retirement village ( by his family )
Oz consumer sentiment now as low as it has been during COVID 2020....
I agree with all that, except for the time frame.I know a lot of people on average incomes who are struggling to pay their mortgage at the moment. Discretionary spending has really declined in 2023 for those who bought property in the last couple of years thinking that interest rates would stay low for some time.
If you're making a lot of money then no problem, but a lot of people on low incomes are struggling to make ends meet right now. Australia is primarily a service economy so we should expect to see more business insolvencies as the demand for a lot of services falls away in the short to medium term. Retail will also continue to suffer.
Inflation will decline as we head into 2024, but I also think we will slide into recession next year and that is where we will bottom out. At some point in the next 12 months we will see both a stock market and property market correction. Then 2025 will see the beginning of a new growth phase.
I agree with all that, except for the time frame.
I reckon we will be in recession by the end of the December 2023 quarter.
As to the growth phase, i think you are being a little optimistic.
Takes a while to shake out the dross, and get the economy on track again.
Mick
Just my random observations but whilst some stocks are doing fine, it's not at all difficult to find weakness at the moment. Start digging, start looking at charts, and there's plenty of it around.At some point in the next 12 months we will see both a stock market and property market correction.
There's a lot of physical things needing the piper paid as well.It could be late this year or early next year but I don't see how we can escape it given global macros factors along with domestic economic conditions. There needs to be a shake out. All the money printing has been putting it off by propping things up, but the piper needs to be paid and the price keeps getting higher and higher the longer we try and avoid the inevitable.
There's a lot of physical things needing the piper paid as well.
By that I'm talking about infrastructure that's not in good shape, supply chain logistics across the economy, shortage of skilled workers in some sectors, etc. Physical things that are going to break if nothing's done to fix them.
Unless you can tie it back to inflation - economic mismanagement creating more inflation problems, that kind of thing. There was some bitching about the budget, labor government etc before that was on topic.I fear this thread is veering off topic now. Perhaps any off topic posts can be moved elsewhere later?
Unless you can tie it back to inflation - economic mismanagement creating more inflation problems, that kind of thing. There was some bitching about the budget, labor government etc before that was on topic.
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