Preparing for a depression in Australia

[archilles]

Hey all,

Just wanted to ask a simple question:

How would you prepare for a depression in Australia ?

For example:

I own a house and have paid close to half of it off, although in todays economic climate it seems to be working out, i'm afraid what will happen in the future if we head into a severe depression and i lose my job ( can't find another ) the consequence will be that i won't be able to pay off my mortgage. My property has great potential and is almost paying itself off BUTTT at the end of the day i still have a $ 450k mortgage that would eat me alive if i was out of work for over 10 months.. I've got a chance to sell it and buy a shoebox 1 bedder in sydney outright, i figure i'll have no debt and a shoe box worth peanuts ( if we go through a depression ) but at least i'll have something and not risk losing everything.


I guess my main priority would be to have food, water and shelter whilst we ride out this massive storm ( which i think will unfold ).


Any thoughts not only on my story but thoughts in general ? I'm losing sleep over this ....

 

[professor_frink]

Hey all,

Just wanted to ask a simple question:

How would you prepare for a depression in Australia ?

For example:

I own a house and have paid close to half of it off, although in todays economic climate it seems to be working out, i'm afraid what will happen in the future if we head into a severe depression and i lose my job ( can't find another ) the consequence will be that i won't be able to pay off my mortgage. My property has great potential and is almost paying itself off BUTTT at the end of the day i still have a $ 450k mortgage that would eat me alive if i was out of work for over 10 months.. I've got a chance to sell it and buy a shoebox 1 bedder in sydney outright, i figure i'll have no debt and a shoe box worth peanuts ( if we go through a depression ) but at least i'll have something and not risk losing everything.


I guess my main priority would be to have food, water and shelter whilst we ride out this massive storm ( which i think will unfold ).


Any thoughts not only on my story but thoughts in general ? I'm losing sleep over this ....

you'll need a gun to protect your stash of food and water. I'd also recommend having a lot of alcohol as well. It will be our new currency when the dollar collapses, can be used as a cheap anesthetic, and is great entertainment for the long, cold nights during winter

 

[noirua]

In the last depression Aussie unemployment hit a peak of 33%. It looks as if severe recession with unemployment reaching 16% is a worse likely scenario due to continued Chinese interest in Australian assets.
The sudden reversal of the Aussie$ from an extreme peak, just above parity, to AU$1.54 to the greenback, is not as bad as it looks and further weakness should help further.

 

[surfingman]

Get an ABN and go this site before everyone gets onto it:

https://www.campbells.com.au/ccc/index.jsp

hmmm wonder if they are publicly listed.....



Why worry about a depression?
Go get another job if you have time to think about covering yourself in a depression, or stop watching the Financial News...

 

[archilles]

i'm hoping i don't have to resort to using a gun lol I'm a sports hunter and have access to plenty - any other options ? Problem is i'd shoot and ask questions later, it's not them i'm worried about, it's me...

Surely we could protect our wealth without resorting to violence, i'd even consider moving back to europe as i'm a citizen there too.

However i like this country, it's were i was born and would like nothing more than to stick it out and find prosperity again.

Anyone else have suggestions ? also any advice on my situation would be appreciated

 

[numbercruncher]

Im not sure that living in an Australian city would be much fun in a depression ....

Apparently us country folk are going to be fine though

Cheaper house and a recession proof job/s or business would be a wise move I would summise ...

 

[Glen48]

Sell the house and take the first offer, maybe look at CFD, option trading for some money???
Rent for awhile until we have a direction, logon to patrick.net to what is going to happen here and how USA is handling it all, they have people now going through bins looking for food and council letting victims sleep in their cars.

 

[pacestick]

Buy two pocket knives get a freind and play this game .My father after school during the great depression would watch his father and grandfather play it. His grandfather was the local singer sewing machine agent and worked dried up .His father had been a printer for the local paper that went broke and gave him one of the presses instead of money.
You take the knife and throw it into the floor next to the other person then its the other persons turn. You constantly say sorry no work available as people seeking work come through your door , you say this so often you get out of the habit of looking up at them. Dont bother going looking for work there isnt any.
You continue to do this for about three years and with a bit of luck someone will start a world war the winner of that war will see it in their interests for you countries economy to flourish and because you were in place as things improved you do quite well

 

[sammy84]

Sell the house and take the first offer, maybe look at CFD, option trading for some money???

Selling in a depressed market and then engaging in one of the most risky forms of trading...not sure if this is the best advice.
Depression is a long way away, the unemployment numbers today confirm that

 

[Uncle Festivus]

Any thoughts not only on my story but thoughts in general ? I'm losing sleep over this ....

This is not advise....thoughts in general?

Debt is the enemy of independance? You are at the mercy of a bank's discretion! Clear your debt's? Unworry - declutter your life by living more simply, within your means?

If...Aus does in fact follow the rest of the world to a depression like economy then those who have the basics and no debt will be better placed to survive. The basics being -

Food & (clean) water
Somewhere to live (other than on the street)
No mortgage/debt

While it looks as though the stimulus has indeed resulted in increased building activity it may also result in an oversupply of dwellings relative to those who can afford to buy them if we do in fact go into a recession like environment (even though technically we may not), so we have all these first homebuyers trying to sell their houses too when they start losing their jobs as well?

I have liquidated all my property holdings and now 'rent' a house on acres with abundant water supply.

Solution - sell current house & rent or own outright a (more affordable) house with food growing enabled backyard if possible. Install a water tank. Buy a generator, budget for double the rent/utilities use for the next 5 years. Then again, it may never happen, so don't worry?

 

[Julia]

Selling in a depressed market and then engaging in one of the most risky forms of trading...not sure if this is the best advice.
Depression is a long way away, the unemployment numbers today confirm that

Hah, this is actually pretty funny! The unemployment numbers are apparently quite wrong because of cutbacks in the ABS staffing levels!

Here is the story from ABC Radio's "PM" this evening:
http://www.abc.net.au/pm/content/2008/s2490008.htm

Ain't it great that our fearless leaders are determining policy based on wrong numbers, just because they're trying to save a buck on ABS salaries!

 

[Julia]

Archilles, this is not advice, etc etc, but you may be somewhat getting ahead of yourself in anticipating a full blown depression. At this stage literally no one knows what will happen.

It would seem a shame to sell your present property on the basis of something which may never happen, especially when you feel it has good potential for the future and you're already making inroads into the mortgage.

I'd suggest that if a depression does happen, there will be no shortage of property for sale, and just as you might want to downsize into something cheaper, isn't it just as likely someone with a more expensive property would want to downsize into something such as you have at present?

But I don't know. Never been through a depression. Good luck with whatever you decide to do.

 

[gfresh]

I've prepared my tent, baked beans, and my shotgun already..

Talk of depression is rather amusing, especially this early on, when local recession hasn't even been agreed upon..

It's like the faintest wiff of an economic downturn, and people start running around with their head cut off. Calm down I say, and worry about things as they come your way.

 

[tommymac]

As people have said, we're a long way off a depression. But the recession is hitting hard in some countries.

Ireland for example is considering cutting Government worker's salaries.

I doubt there is much you can do if a depression hits. Reducing debt and building up cash would be the best way I guess.

If you lost your job with a large mortgage and knew you would find it difficult to make repayments, I would speak to my Bank ASAP. They may be able to find a win-win solution.

 

[UBIQUITOUS]

The first step is to preempt whatever may be coming. The fact that you have started this thread, shows that you are considering the future. Acting on your 'hunches' is the real test though.

So well done, if you do act.

 

[pilots]

Yes it was not long ago that OUR GOVERNMENT was telling us IF we had a recession coming it would be light years away, MY HOW TIME FLIES.

 

[Farencue]

Hi achilles
What do you do for a living?

 

[archilles]

Hey i'm a graphic designer - I feel as though our industry will be hit pretty hard should this situation continue to spiral down.

Believe it or not i like to take a "chicken little" approach because i figure nothing can get worse than a worse case scenario - things will only get better. I don't trust government at all, they're always getting it wrong.

I think unemployment and inflation rates are alot worse than they really are.

All i want to do is be prepared for a worst case possible depression, i don't want to wait and see what happens - i've done that and now we're all staring down a scary barrel and no one knows what is happening. Why should i lose my house that i've busted my ass off for ? Just because of silly policies and greed.

I think there's nothing wrong with a back up plan, if anything i hope i get it all wrong and things become prosperous again..

 

[Trevor_S]

Hah, this is actually pretty funny! The unemployment numbers are apparently quite wrong because of cutbacks in the ABS staffing levels

It is interesting though that they use other statistics to suggest the ABS unemployment statistic is wrong (i.e they believe the statistics they want to believe and disbelieve the ones they don't want to believe) and then theorise that the reason it MAY be incorrect is because of cutbacks.
Where is the information they have gathered to show the ABS number to be incorrect ?

The ABS used to piss me off I used to have to spend 5 - 6 hours once a quarter gathering information for them about my business. I got the hump after doing this several times and told them to piss off (Politely by simply returning the survey with a covering note saying I was no longer interested in filling this out), they sent me a threatening letter saying they would fine me (I was after all compelled under legislation to work for free for the Government) but they never did send me a fine nor did they keep sending me the surveys I had to fill out.

 

[metric]

go into a depression debt free, or debt you can manage....whatever it takes.

there will be bargains for the unencombered....


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