UNLOCKING THE RICHES OF OZ: A CASE STUDY OF THE SOCIAL AND ECONOMIC COSTS OF REAL ESTATE BUBBLES 1972 TO 2006
In May 2007, before the sub-prime mortgage bubble had burst in the USA, I published ‘Unlocking the Riches of Oz‘, a summary of Australia’s real estate bubbles over the last 35 years, on behalf of Prosper Australia.
It was based on Australian data, but I considered the data therein stood as a proxy for the same enormous land price bubbles that existed in most western countries.
As it eventuated, on the recommendations of US Treasury Secretary Hank Paulson in a telephone conversation* to the Australian Treasurer Wayne Swan, Kevin Rudd’s government took immediate steps to spend more than $50 billion in order to keep the Australian property bubble inflated.
Unlike the US, the Australian government’s action avoided an Australian recession, but simply ‘kicked the can down the road’ to a later date for a far greater financial collapse.
*Swan recounts the telephone call that he answered in his car at 6:30 am in Maroochydore on 10 January 2008 in the first chapter (‘No Ordinary Phone Call’) of “The Good Fight: Six years, two prime ministers and staring down the Great Recession”.