I’m just over half way through reading Lindsay David’s Australia: Boom to Bust.  I’m up to page 123, which is headed “Property prices in Australia were not always disproportionate to incomes.”

What a sensible, well-researched book! How it challenges the existing Australian mindset! (“We’re different!” or, “It’s supply and demand.”)

So far, David has twice emboldened the sentence : In Australia, Real Estate prices do not depend on supply and demand, but the banks’ willingness to lend excessively to property purchasers. Spot on! That sentence squares exactly with the statement in a recent post of mine by former Wall Street banker, now professor of economics (UMKC), Michael Hudson.

Lindsay David has Australia resting on three pillars: financial institutions, natural resources, and real estate. He dissects and analyses each pillar and shows how the collapse of one must affect the others. His description of an auction (pp.110-112) is priceless—so to speak—not because it is far-fetched, but because it is so hilarious to see such rampant stupidity documented in print.

Even before I’ve completed it, I can recommend Australia: Boom to Bust as an excellent read.