… ALL BAD!
Hot on the heels of the Australian Bureau of Statistics updating its Australian System of National Accounts, my colleague Dr Gavin Putland, Director of the Land Values Research Group, has released another fascinating series of charts confirming the portents of the Kavanagh-Putland Index.
They show Australia has been set up for a financial bust as big as, if not bigger than, anywhere else in the world.
I’m confident time will shortly prove the statement correct, because Gavin Putland and I have put in years of work quantifying Australian real estate bubbles and their damning consequences. This one will put others to shame.
In bubbledom, we are the champions!
Who’s to blame?
We are. Australians are; particularly the baby-boomer generation. Many of us got a warm inner glow as our land prices shot up to nosebleed heights from 1999 to 2007 under the bubble-ignorant political leadership of John Howard and Peter Costello, only to be followed by the equally ignorant Rudd-Swan-Gillard regime.
The warm inner glow was sorely misguided, because future generations of Australians were being locked out of housing opportunities, and the X and Y generations began to realise the fact.
Most of the boomers didn’t care, though. Wasn’t their wealth increasing rapidly? Couldn’t they borrow more against their assets?
Australia’s politicians, either ignorant of the realities of property bubbles, or with an eye to not losing baby-boomer votes, were not up to disabusing them of the notion that skyrocketing land prices were good for the nation.
So – no, Australia has most certainly not avoided the global financial collapse. We’re living on a rapidly diminishing band of borrowed time, and no one’s up for the simple fiscal adjustment that would turn this sad presentiment around.
The “Occupy” movement and unions do have an inkling, but they’re not even warm yet.