Australia Has Highest Household Debt to Disposable Income Ratio in World

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Paul Volcker is fronting the U.S. Congress to push for restrictions on the proprietary trading desks of U.S. banks. The RBA stunned economists yesterday who had unanimously predicted the central bank would raise the cash rate to 4%. It did no such thing. Stock indexes in the U.S. rallied over one percent, but jobless figures come out later this week. And that makes everyone nervous that despite the nice recovery narrative, the economy still sucks for real people.

So we’ll see how it goes in Australia today. Our general survival strategy at the moment is to gradually reduce exposure to all but a select portfolio of stocks that are leveraged for big returns. As to the first issue – reducing exposure to stocks – now might be a good time, according to Morgan Stanley economist Gerard Minack.

Minack reckons we’re in for a correction after this 9-month “relief rally.” In a note to clients Minack wrote, “We see the rise from March 2009 as a typical relief rally that follows major bear markets. Those relief rallies can occur regardless of underlying macro conditions, regardless of liquidity conditions and – most importantly – regardless of what happens next….The fundamentals did improve this time – systemic financial crisis ended – but we think risk assets have swung to pricing a better outlook than is likely.”

Minack says that while the rally could take developed market equities up to 75% or so from their March lows last year, a 25% correction is now in order. To be fair though, he doesn’t think the market will make new lows after that – only that it’s gotten way ahead of itself at these levels.

The Grand Old Man of Dow Theory, Richard Russell, is even more direct. He’s predicting a “second round of pain” for stock markets. He wrote, “I note that most analysts are now bullish, and that they are recommending stocks for the ‘continuing advance.’ At the same time, most economists are optimistic, arguing that the ‘longest recession since World War II has ended.'”

“Typical, last March everyone was bearish and the market was establishing a temporary bottom. Now that everyone is optimistic, the stock market is topping out and the public (the amateurs) are about to receive their second round of pain,” he wrote. Ouch.

To protect investors from this pain, the editors of our three financial newsletters have been using trailing stops and stop-losses on open positions (as rough guides). They are not always popular with readers. But they do save you from having your capital destroyed in bear market moves. If you’re not using them, now would be a good time to seriously reconsider it.

With the Boomers now heading slowly for the exits of the share market (converting their portfolios into income they can consume) the ‘weight of money’ argument for owning a basket of blue chip Australian stocks has never looked so light.

We could be utterly wrong, of course. But why not own a handful of smaller miners and small caps where business growth leads to real earnings growth and higher share prices? Surely this is a better bet that buying and holding for the next ten years, isn’t it?

The best financial survival strategy of the coming years begins with not expecting the share market to be a retirement machine. True, the compulsory super tribute will probably be raised and this should bring more liquidity to stocks (and government bonds). But what you’re looking for are good businesses, not just a good stock market.

Australia’s household debt to disposable income ratio

Australia's household debt to disposable income ratio

Source: Australian Bureau of Statistics

Did you know that Australia has the highest household debt to disposable income ratio in the world? It’s even higher than America’s. Bigger homes. Bigger waistlines. Bigger debts. Australia is in the middle of its own credit boom, complete with all the social consequences. And the financial consequences.

The chart above doesn’t have the most recent data. It appears to show a gentle decline in the household debt-to-disposable income ratio. Since then, though, due to higher debts and income growth that’s not quite kept up, the ratio has turned up again. It’s around 156% today, largely thanks to the mini-boom in mortgage lending spawned by the diabolical first home owner’s grants.

Speaking of which, Fitch Ratings chimed in with a gloomy forecast for Australians overnight. It said that rising interest rates in 2010 would trigger more home loan and commercial mortgage defaults. It said this would cause some “deterioration” in the quality of assets that underpin mortgage-backed bonds. Hmm. That sounds soooo familiar.

Even though Aussie rates did not rise yesterday, they are at the low end of their historical cycle. You’d expect them to go up more this year. And Fitch says that’s bad. “The improvement in Australia’s structured finance asset performance, which was experienced during 2009 thanks to historically low interest rates and a resilient economy, is unlikely to continue during 2010,” said David Carroll, the director of Fitch’s Australian structured finance team.

Fitch is talking about bonds and structured products made up of mortgages and commercial real estate leases. That’s an interesting story and will affect the quality of bank assets (and perhaps mortgage funds and listed property investments). But the real story, politically, is whether all those first home buyers who encounter mortgage stress will want to vote for Kevin Rudd again.

By the way, we copped it big time from dozens of readers for dipping our toe into the climate change debate a few weeks ago. We were told – sometimes not so politely – to stick to our knitting (even though the topic has clear implications for the economy and financial markets). By bar the most often repeated objection to our “infantile” thinking was that the science behind climate change is not disputed and that it’s all peer reviewed in a process that’s non-political, objective, and thorough.

Harrumph. The bigger the lie is, the harder it falls.

Dan Denning
for The Daily Reckoning Australia

Dan Denning
Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.
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Comments

  1. Is there a glacier out there that is not shrinking?

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  2. There is- 2 in fact. The Fox and Franz Josef glaciers in NZ have made small gains in the last decade (after decades of shrinkage), primarily due to increased precipitation.
    Whether or not you can consider that evidence of no climate change I do not know.

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  3. Increased precipitation can make a glacier “bigger”. Warming can also make a glacier “bigger” – bottom melting on the bedrock increases the flow of ice and you end up with more ice at the head of the glacier. But what you end up with is more ice visible at the head of the glacier, and much less inland as it drains itself to death.

    What is the lie Dan? Scientists are fallible, and sometimes they make mistakes, but I have not come across anyone who can definitively tell me why a global consensus of scientists would come up with a massive (and it really would be massive) lie about this.
    They could get paid a hell of a lot more working for a biomed or an oil industry research company.

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  4. Having read your full of insights web columns in last couple months I have developed bad feeling about Aussie economy in the next few years. The million dollar question is how we prudently protect our wealth ?

    I agree with you that sharemarket in general looks pricey, but what is the alternative ? real property is more pricey and overvalued. Gold and other precious metals plus commodities also look pricey, at least compared to price 6-12 months ago. Fixed income / bonds are risky due to possible interest rate increase if central banks moved to contain inflation plus credit rating risk. The only safe havens IMHO are defensive shares like BHP / Rio, Woolies / Metcash, and CSL / SHL etc plus holding big amounts of cash to take advantage of better deposit rates offered by banks. At least in Australia I believe our RBA would not think to help fund the government deficit by allowing inflation running wild like in UK and US. So, defensive shares + Cash …this is what I think sensible choice in Australia…unless I put my faith wrongly in Glenn Stevens and his gank at the RBA and he allows inflation running wild in Australia.

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  5. TV: Climate scientists wouldn’t get hired by the Oil industry or a Biomed. Plus, if they are tree-hugging types, they wouldn’t want to.

    The issue that doesn’t get discussed so much is that this is not one issue. This is at least three issues that get rolled into one by the media.

    Three issues: Pollution, carbon emissions, climate change.

    Is pollution bad – yes.
    Is climate change bad – probably, yes.
    Are carbon emissions bad – unproven.

    So roll them all into one, call it climate change and then ask if we should reduce carbon emissions to stop it? Of course people answer yes. In fact it has become taboo to say no.

    So for politicians to leverage public misconception, dodgy research and unproven theories to tax the mainstream – is not so good. Inflation is a tax, but it is pretty indiscriminate and hurts the poor a lot. Instead, why not introduce a tax that the mainstream thinks is a good thing? And you can target that tax as much as you like. Maximum control + popularity at the same time.

    Politicians 1, populace 0 (I think we all know the score is much more extreme).

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  6. TV, scientists are too often compulsive obsessive liars. They and their “solutions” have been the biggest threat to human existance ever since the renaissance. Anything to get their research and funding up and to make a name for themselves (the mad scientist is not some old wives tale). We need external auditors to safeguard the peer review and full investigations of smoking guns when a publication editor is attacked and we need them to understand a hypothesis is not a solution and we aren’t to be the guinea pigs of their experiments. And when they get outed for fraud their careers should not only be finished but they must be gaoled rather than allowed to crawl off into some hole.

    The thing that irks me most about atmospheric science is that so few of them (that are not retired) will admit to how infantile the science and their understanding is. The recipe for a dangerous cocktail combine ego and stupidity that might rival those of politicians, public servants, and banksters but it also might just compliment them when cap and trade crony ticket clipping and tax gouging schemes are brought to bear by the Brit liberal fascist narrative society.

    The geologists are on firmer ground so find us some of those that have a human induced radical climate change theory that might generate equal levels of forces to explainable natural ones that they have observed in the past. But if you can’t explain a force physically evidenced in the past you can’t exclude it from being the dominant factor acting upon us right now and carbon sinks could be as good as those foxes scientifically introduced to control rabbits.

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  7. So to continue on from yesterday’s theme of “Australia’s millions of baby boomers retire … From the looks of it, the stock market will crash, government finances will be stressed, and the economy is going to slow” …

    The “best financial survival strategy is”: Reduce exposure to Australian blue chips (and housing I guess?) and “own a handful of smaller miners and small caps where business growth leads to real earnings growth and higher share prices.”
    With that “select portfolio of stocks” being “leveraged for big returns.”
    And “using trailing stops and stop-losses on open positions”.
    Because “they do save you from having your capital destroyed in bear market moves.”

    Hmmm … I wondered why everyone was talking about the weather.

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  8. As challenging as PB’s mental condition might be, I lost interest in it once I figured it out. So moving on to new challenges, does anyone have any better financial ideas than we are all pretty much stuck where we are – Apart from taking up DD’s kind and totally self-disinterested offer?

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  9. All depends on your stage in life. DD’s advice of getting out of shares (basically) is reasonable. Even optimists didn’t think the ASX 200 would reach 5k. Bargains are probably there, but I don’t know of any – nor do I care at the moment.

    Pay off debt, and be ready for inflation, so don’t hoard too much cash. And with the cash it’s hard to know where to put it – brainstorm and think of something productive … maybe upgrades around the house to make it cheaper to run and longer lasting, maybe get a bit of land you can easily travel to and dig around, grow stuff in, maybe keep a goat, etc? Whatever people around you are doing, consider doing the opposite ;)

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  10. I tried some goats milk recently Dan and it was pretty good. Some friends of mine have Boer goats and also some milkers. Goats were prominent in Aussie history (European settlement). Although I dont know the future maybe one day they will make a comeback. My feeling is that people wont turn to self sufficiency unless they just have no other choice. I imagine with our current consumption based economies and taxes that if people opted for self sufficiency that bankers and politicians would lose most of their wealth and power very quickly.
    I suppose I love simple living but for many it would be a great shock. The main thing which I would miss would be the freedom of travel if our motoring abilities were limited in any way. Australias an awful big place without a personal motor vehicle.

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  11. Im sick of shares too. Got a couple of minor punts left which I couldnt give two hoots about. All others sold. A relative of mine is very unhappy with his small cap portfolio lately. The AUD is looking toppy. What ya reckon Ross?

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  12. Dan stated

    “Our general survival strategy at the moment is to gradually reduce exposure to all but a select portfolio of stocks that are leveraged for big returns. ”

    I totally agree and over the last 2 quarters I have successfully invested in micro-Aussie energy stocks with prospects and operations from Namibia to the US (with an emphasis on the US). It is a roller coaster ride in this sector and not every prospect will be a success BUT a key investment criterion for any punt of mine is that the potential upside must far exceed the likely impact of market turbulence (at least in the medium to long term).

    Also consider how any pick you make is likely to progress (transformationally) if Marc Farber’s gloomiest predictions become a reality at some point. Some players may actually be positioned to do quite well in both good or bad economic conditions.

    Clearly there are micro to small companies in other sectors, which are traditionally perceived as “high risk” and also present huge upside postentials. However, the key investment criteria for any investment these days should is condideration of downside in the first instance. In the case of oilers I have a firm belief that a barrel of oil will always be worth a barrel of oil. While there is little risk here there are very significant risks concerning drilling operations which companies generally quantify these days. This risk can only be managed by diversification and by gaining some technical knowledge about geology and drilling. Gut feel also plays a role.

    In the case of energy, the downside of a well diversified portfolio has to be the price of energy and in my opinion this is a low risk in the medium to long term.

    On the issue of debt …… hmmm household debt is defined in AUD. Aussie banks on the other hand use OS funds to support the loan book. IF the debt yoke on the backs of new home owners were to be (hypothetically) inflated away at some point in the future, something would have to give. Something would have to go bust AND that would be the loan book me thinks.

    That’s why I share one of Kris’ crazy (or not so craz) views which goes along the lines that some tiny specs actually present lower long term investment risk that some big zombie banks.

    cheers

    Coffee Addict
    February 4, 2010
    Reply
  13. On climate change: as far as i know (little) methane is 25 x stronger ‘climate effecting gas’ than carbon dioxide. only thing is that methane doesnt come out of dirty factories, tends to be largely invisible and also tends to correlate well to the provision of a nice steak. so we’re tackling carbon cause its dirty & ugly but if we were really serious we’d be tackling methane. until methane gets firmly on the agenda, im not taking any environmental lobbying seriously.

    on investing, im also looking for ideas at the moment. yesterday i called my superfund and got them to transfer what little i have out of aussie equities into cash deposits. im also in the process of selling a place (leaving 1 unit and a half unit i live in with my girlfriend). im going to get a bit of money of this sale and am trying to work out what to do with it. a portion of it will definately be set aside for travel, some to pay down debt the rest??

    im considering: transferring some to the US to enter a short/put option position on the S&P (small amount, fairly leveraged) i think currency risk will be in my favour over the next 6 months (falling aus $ likely on balance in the near term). id short the asx/put option the asx or some aussie shares but im not overly confident in a massive correction here. i wont be buying gold or precious metals in case china comes off the boil and the demand for commodities diminishes across the board, plus gold market seems to be built on so much speculation you never know how far ahead others have speculated to get it where it currently sits. ive also thought of transfering some cash to another currency and just leaving it for the time being, maybe the swiss franc, i understand they have a reasonable economic situation and could be a safety play in europe (where i intend to travel later on this year).

    ideally buying a little patch of ground not to far away would be my preferred option but i wont have that much for anything close by and dont really feel optimistic enough to buy land just to sit on longterm, i guess id prefer to wait till i was ready to build a place myself – hopefully in a few years. have considered buying a little place in NZ somewhere near the coast but i barely get enough time to get away as it is.

    would like to hear anyone elses investment ideas for the coming 6 to 9 months.

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  14. Matto, keeping track of the open market operations of the RBA, http://www.rba.gov.au, in tandem with other interesting data, makes me think that the value of the AUD against gold has not yet been discounted for what has already come to pass, let alone what is yet to come.

    Debt markets are sick, no doubt about it. I think the RBA & central banks everywhere (governments) have no choice but to continue buying whatever investors won’t, which is anything (unfinished real estate, empty matchboxes?), or else.

    So you shouldn’t underestimate the seductive drug of currency inflation & its effect on asset prices, particularly ‘liquid’ instruments such as the stockmarket.

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  15. Justin – further currency expansion/inflation would lead me to look at ‘hard’ assets such as commodities and real estate, youre saying the all ords in general could become a focus for printed money? and also gold is yet to rise against the AUD in regards to the deficit situation?

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  16. – just to confirm.

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  17. Deo,

    Not million dollar question, $500,000 … err $250,00. … no wait, $100,000 que …. Damn … Anyone give me $50 for this question?

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  18. Sambo,

    Are carbon emissions bad – unproven.

    So what level of carbon emissions is good ?

    When you consider the planet spent billions of years burying all the stuff we dig up and burn, you can imagine how throwing it back into the atmosphere in a little over 100 years might not be good for life.

    Our World is finite. It’s resources are finite which includes our atmosphere. The population seems to know no limits and our consumption (based on burning ever more stuff) knows no bounds.

    Basic science proves that Carbon Dioxide has an insulating property compared with the other trace gases in our atmosphere.

    The green house warming principle is known and basic science.

    It is not a leap of scientific faith to believe that the two known effects when applied to ever greater concentrations of CO2 in our atmosphere will over the globe warm the mean temperature.

    The only debate is (in my opinion) on the scale of change and the timeline.

    This (and measuring the mean of such a diverse and massive system such as Global Climate) is where the science is ‘unproven’, but in reality we pretty much get the message even if some (perhaps like yourself) wish to ignore it.

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  19. Just read Deo’s post: I think in terms of protecting capital cash here in australia isnt bad, theres reasonable rates available and AUD inflation (hidden or real) doesnt seem to be a problem over and above these rates at the moment. reasonable defensive blue chips could be ok but im not bullish on aussie stocks so that only leaves neutral and bearish, which exposes you to risk without the reward.

    What im looking for is particular plays to try to make money at the moment rather then protect capital (that will already be a seperate portion of money i have).

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  20. Confirmed.

    But you should think less in terms of inflation as an increase in the money supply & more in terms of a debt quality issue. Just because the RBA is expanding the supply of currency doesn’t necessarily mean it is ‘inflating’.

    The RBA has been & continues to reduce the quality of the securities it holds to collateralise its liability, that is the AUD. I believe they have no choice, as it’s curtains for the world as we know it if they don’t, the debt markets will fail. It’s curtains if they do, but they can stretch it out as long as people are dumb enough to accept their paper as payment (which could be a while yet).

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  21. Justin – like the US Fed pumped piles of money into the system to secure credit default swaps and subprime funds that should have collapsed, in the end the funds havent hit the economy to cause inflation but a loss was not taken and an equal amount of funds were created to ‘shore-up’ the endangered assets, thereby saving some temporary pain but jeapordising the security of the currency and the federal reserve?

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  22. …and the long and the short of all that is that gold is still good vs. AUD.

    i’ll look into the RBA’s on market transactions as soon as i get a chance.

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  23. Indeed, the situation is no different in the US than here, except for that the USD is a far bigger, far more liquid market than the AUD. Think Eurodollars.

    I have some regard for the idea that the USD is the strongest of all, regardless of the fundamentals of the US economy, which are no doubt terrible. Having said that, the securitisation market was very large & liquid, up until the day it wasn’t.

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  24. thanks justin, i’ll be bearing it in mind for sure.

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  25. Just wait til rates really rise and the cost of servicing debt goes ballistic ala Labor economics

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  26. As Joe says, the greenhouse principle is fairly basic science. That isn’t to say that a whole pile of confounding factors make it difficult to work out the quantitative effect. But a couple of salient facts always get me.

    1. The global AVERAGE temperature difference between a glacial (ice age) and an interglacial (such as the last few thousand years) is around 3-6 degrees C. The climate change happens slowly (1000’s of years) when going into an ice age, and a bit more quickly (i,e hundreds to a couple of thousand years) coming out of an ice age. We came out of the last ice age about 10,000 years ago, roughly. The temp has been pretty stable since then.
    2. We have added 0.7 degree celsuis to global average temperatures in under 100 years.
    Anyway, I read this site to find out about stuff I know bugger all about. For instance: I really like the idea of buying a large block of land (like 20+ acres), but I only have enough cash for 1/3 deposit. should I go ahead and buy anyway? In Tassie, you can still buy reasonably priced land 1/2 hour from the major centres, but I still couldn’t buy outright. I don’t have any other assets, just cash.

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  27. TV – i visited a friends place on the weekend with 5 acres in northern nsw. the place is covered in fruit trees with a large vegie patch and next they are looking to get 1 or 2 cows and maybe a goat. it doesnt seem like much but the 5 acres they had was producing more than enough food (heaps actually), without requiring too much upkeep (its only 5 acres after all)

    i think the trick was that everyone else around them was on at least the same amount of land so the other houses were pretty much out of view.

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  28. TV,

    re : “2. We have added 0.7 degree celsuis to global average temperatures in under 100 years”

    Mannmade change? Yes, due to manipulated and corrupted data and models combined with the gross politicization of the science.

    And no, I am not just talking about a few emails, i am talking about models with “Fudge Factor” code in them, I am also talking about how GISS picked 1500 weather reading stations out of 8000.

    You might want to revisit this one. Just like last time around, you’re not going to get this information from the mainstream media.

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  29. MadJak.

    I don’t get my info from the mainstream media. But I do know where you got your information from – a certain ultra right-wing fringe columnist? Or perhaps just someone paraphrasing him?
    Temperature anomalies for these records are calculated locally from local baselines. They are not, as you assert, ‘picked’ by NOAA or Goddard, they are provided independently by the WMO and freely available to all. So it isn’t up to NOAA or Goddard to ‘decide’ which stations to use – they use what they are provided with. Does this mean that the WMO is in on the conspiracy too? Cripes!
    Secondly, what you are referring to is an assertion that the GISS record picked coastal stations over mountain stations – if this was the case, don’t you think the temperature anomalies would be just a tad more than part of a degree? What do you reckon the temp difference is today between Sydney and say Mt Kosciosco? I reckon it might be slightly more than that…

    Of course, you and I could argue about this indefinitely. Perhaps you can point me to a graph that uses all 8000 stations.

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  30. TV,

    Good response (better than I have seen elsewhere I must say). Yes, I do refer to Mr Delingpole occasionally and I do try and keep my sources as broad as possible.

    Some of it, like the code mentioned previously has come from the CRU, yes, I know it was stolen, big deal. And yes, I have looked at the code and I am apalled.

    Being that selective with data is inexcusable though, don’t you think? I don’t trust any scientist that admits to creating “Value added data” to that extent.

    Yes, I would like to see a graph using all 8000 odd stations. But of course, therein lies the problem when people who have the data refuse to release it, or claim they can’t find it anymore. And when they don’t release their models also, well then I just get frustrated.

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  31. Madjak.

    Do you want them to release data, and in particular models so that you can have a crack at re-analysis? I’m afraid I know bugger all about modelling, I deal with measured observations mostly so I stick to those.

    The one thing I don’t get, and that no one has ever been able to explain to me, is why this huge collection of scientists worldwide would be involved in some sort of climate conspiracy. Why? What’s the point? Who benefits? And you can’t use that tired old line of “they are grabbing their funding wherever they can”. If a scientist was that keen to make cash, he wouldn’t be a scientist, of any ilk. Based on remuneration to hours worked, science comes out as the most underpaid professional occupation around. You sound like a scientist of some sort – do you reckon you get paid squillions? I bet not.

    I know of a prominent medical research institute (university associated) that pays lead authors 10K if they publish in Science or Nature. I’ve never heard of that happening in environmental or climate science – maybe a pat on the back, but thats about it. Its not going to make me stop trusting medical results, but as far as grey areas in science funding go, I don’t reckon climate/environmental science is the big bickies…

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  32. Hi TV,

    Good call, and no, I don’t buy into the “they do it for the grants” argument. Having said that, for scientists who have made very public political stands on an particular matter, they will find it extremely hard to back down – particularly when governments are making decisions based on these things or an ex US VP releases a video full of fallacies which get quoted by powerful people.

    I really didn’t buy into the whole consensus argument either. 2,500 scientists agree with the IPCC – BS. So many comments were ignored in the IPCC review – proven with both “Climategate” and the Himalayan glaciers thing.

    There is, of course the whole question around carbon trading and who would make Big $$ out of that.

    What I really get wound up about is when archaeologists are afraid of mentioning that village remains are being found in Greenland as the Ice caps retreat because “the reason it was called Greenland was a big lie by the vikings”.

    Science has to have an environment of criticality and intellectual freedom. When Politics mixes with science, both of these things disappear.

    Let’s face it, there has never been an evenly balanced debate on this matter has there?

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  33. And the news just keeps on coming:

    http://www.rnw.nl/english/article/error-dutch-polder-data-undermines-trust-ipcc

    According to the IPCC 2007 AR4 report (the one that got the IPCC a nobel peace prize with Al Gore), and yes the same one that said the Himalayan glaciers would disappear by 2035, and yes the same one that apparently had a graph from wikipedia in it when it was released..

    It now turns out that that the section around rising sea levels was wrong too -apparently acording tot he IPCC half of the netherlands should be underwater.

    If this keeps up, no one will ever believe a scientist again.

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  34. In New York there is a lot more concrete than there was in the old days and concrete holds the heat nicely.

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  35. If you think it’s impossible that climate change is a pack of lies, take a lesson from an expert on deception:

    “All this was inspired by the principle–which is quite true in itself–that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying.” (Adolf Hitler)

    http://en.wikipedia.org/wiki/Big_Lie

    (I’m not saying the world isn’t warming, but that bigger lies have been told before and were believed, at least for a time).

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  36. Bertie,

    Yep – the effect is called urbanization and many of the stations around the world were farmland 30 years ago, and are now surrounded in concrete. Even NASA has had to admit this.

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  37. Dan – do you reckon Buying a pallet of snow chains for Melbournes winter this year would be a good investment?

    I am actually seriously considering doing something like that. Yes, it’s risky, but judging by the winter up north and some of the ocean readings down this way, maybe it could be a play worth making?

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  38. You could be right, MadJak. I think that regardless of the current debate the climate in Australia is changing. Ask any farmer, or anyone who has lived in one place long enough. It looks like there was a cooling phase at the first half of the 20th century (it was about as hot as now around 1900), with a bit of a warming phase at the moment, but who the heck knows what’s really causing it all – so who the heck can realistically predict anything? Modelling is mostly rubbish. Anyone can do modelling and get it completely and utterly wrong – nobody seems to remember the models that failed, only the ones that are still working … it is in this way that the retrospectoscope can act as a tool of self deception.

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  39. Dan : RE: Models. Agree tortally. Unfortunately when people see al gore shwo them a graph from a computer people goe “wow, it came from a model so it must be true”.

    Case in point : CRU Code :
    * Snip
    ; Apply a VERY ARTIFICAL correction for decline!!
    ;
    yrloc=[1400,findgen(19)*5.+1904]
    valadj=0.,0.,0.,0.,0.,-0.1,-0.25,-0.3,0.,-0.1,0.3,0.8,1.2,1.7,2.5,2.6,2.6,2.6,2.6,2.6]*0.75 ; fudge factor

    * Snip

    If your saw this sort of thing for a Stock graph with someone saying “we have been experiencing exponential growth in profits over the last year”

    What would your response be?

    invest or run?

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  40. …try swallowing a glass of tabasco sauce…notice how hot your mouth feels and naturally you breath much faster to alleviate the sensation of heat thus converting oxygen into carbon dioxide quicker than usual…truth is…sun’s activities affect earth’s metabolism much the same as tabasco sauce affects YOU…duh!…

    Reply
  41. Does CO2 cause a greenhouse effect? In a greenhouse an insulative shield is the principle mechanism. Since hot air rises the hottest part of the structure will be under the roof/apex. This may be relieved through ventilation. What do we find in the atmosphere as we climb higher…hotter temps or cooler?
    There is no insulative shield high above.
    Does CO2 trap heat? Only to a minimal degree and the point of saturation is quickly reached discounting CO2 as a significant (taxable) contributor.

    Reply
  42. Why would I bother believing any claim by the IPCC.
    A recent error for example. In 2007 the IPCC claimed that 55% of the Netherlands was below sea-level. Now revealed as a falsehood. Its in fact 20%.

    Reply
  43. The Global warming issue is a bit of a smokescreen. The real issue for us all is whether we think it’s wise to keep on polluting the planet and using up all of resources at the current rate? I think not.
    Short of a cull of the population there are going to be far too many people for the resources we have.
    This is where the “climate change” issues are valuable. It’s about the resources stupid, as Bill Clinton may have said, before lighting that cigar.

    Reply
  44. Cull the population?

    Reply
  45. Uhm, Moray, No-one likes to Cr@p in their own backyard. One thing is for sure, combatting C02 will not make a monkeys uncle of difference to the pollution levels. Why because it is a trace gas, not a pollutant. C02 is essential for plant life on this planet.

    In fact there is research to suggest that increased C02 levels have actually boosted the crop yields in many locations around the world. Yes, we can thank C02 for helping us to feed the masses.

    With regards to overconsumption of resources, that argument has been made since the early 1900s. Too many people, not enough food/resources. People tend to find solutions for these issues.

    It seems to me that the best way to curb population growth is to get people out of poverty and give them a good education, as has been demonstrated in many western societies (i.e. the wealthier the population, the lower the birth rate, usually). Get them a TV and an Xbox.

    Reply
  46. Great comments on this article, thanks to all who contributed.

    Reply
  47. Don’t know about you Dan; But I gave the Aussie snow chains idea the skip – And loaded up on European bulldust filters instead. Purely precautionary of course! :)

    Reply
  48. I’m pining for “Penicillin Pete” prozac – Yunno – The bloke who comes out with witicisms like “just a juvenile in a senile old mans clothing. And messing with you is just so much fun … And I couldn’t give a rats if you don’t find this funny. All the more point to it!”

    Come on – MJ’s a bit lame – Show us the naked clawed insane creature shrieking at the moon again … Woof, Woof! :)

    Reply
  49. Hey PB – It’s the weekend – Come out and play … Crazy Jakke the old Dutch pirate’s waiting for you in Vondelpark. Woofy, Woofy! :)

    Reply
  50. Come on prozac … Pop ya head up out of your hole – There’s a few cartoon characters like Mickey Mouse and Little Black “Sambo” and “Bertie” Beetle and Mad Jack the Pirate who’ll all be totally lost to us without you … Yap, Yap! :)

    Reply
  51. There’s a few other things I may choose to ask you about if ever you aren’t too busy Pill Boy? But please DO take your time … There’s definitely NO rush.

    So toodle pip and nitie nites from poor senile ole Uncle Ned (‘n all his “ilk”) … And Woofy, Woofy Poo to you too! :)

    Reply
  52. …given that “In a greenhouse an insulative shield is the principle mechanism”…one can deduce that it is the earth’s crust which is this insulative layer, the earth’s core which is the interior of the greenhouse, and the atmosphere around the earth the heat radiating from the earth’s crust…one could deduce that the insulative shield for the atmosphere is the force of gravity which holds the contents of the greenhouse within, so it would be this force of gravity and it’s fluctuations which cause global heating or cooling….gravity is static electricity, the passage of the solar system through the varios areas of space could be the activator for magnetic/electrical fluctuations…thus, climate change would be occurring on all the planets in the solar system including the sun which itself seems to have a cycle of activity indicating that the space we travel through has a wave or band like structure…now…how can we put these theories together to formulate a profitable investment strategy…

    Reply
  53. Interesting Mike.
    There are some greenhouse technologies such as rock beds (heat up during day and give off heat slowly at night) which contribute energy savings within heated greenhouses. To my mind this compares better to the effect of CO2. Without insulation of course you still have no greenhouse. The word greenhouse distorts peoples perceptions and creates fear (whether by accident or design).

    Reply
  54. How does a heading of “Australia Has Highest Household Debt to Disposable Income Ratio in World” translate to posts relating to cliamte change.

    Why don’t people on this site stick to the topic, no one has discussed anything remotely close to what the article was illuding to

    Reply
  55. At the same time as 4 in of snow falls in Manhattan and Sydney is drowning in rain we have a secret emergency global reserve bankster convention in Sydney. It is going to be harder to pull up at pedestrian crossings if “smart casuals” appear before you on pedestrian crossings this weekend. Wonder what they will come up with? Surely won’t be public service cuts, surely won’t be an end to the new push for increased tax gouges on assets rather than expiring rates of the fraudulently produced consumption they cooked up for 40 years.

    http://www.news.com.au/business/secret-summit-of-top-bankers/story-e6frfm1i-1225827289543

    Reply
  56. Lowy’s Ilona tub is at its dress to impress occasional anhcorage off Double Bay and the odd warship is showboating in Sydney harbour today. So too we get an idea of the future of crony & militarist public policy development Trilateral Commission style (except that the Japanese are now thumbing their nose at them).

    Reply
  57. This is a regular thing along the east coast of Australia (secret banker meetings), except now that it’s in Sydney it makes it to the news.

    Reply
  58. Reply to Dan:
    “All depends on your stage in life. DD’s advice of getting out of shares (basically) is reasonable. Even optimists didn’t think the ASX 200 would reach 5k. Bargains are probably there, but I don’t know of any – nor do I care at the moment.

    Pay off debt, and be ready for inflation, so don’t hoard too much cash. And with the cash it’s hard to know where to put it – brainstorm and think of something productive … maybe upgrades around the house to make it cheaper to run and longer lasting, maybe get a bit of land you can easily travel to and dig around, grow stuff in, maybe keep a goat, etc? Whatever people around you are doing, consider doing the opposite ;)
    UN:F [1.7.5_995]”

    If most people are deleveraging/unwilling to go into further debt and the banks are cleaning up their balance sheets and tightening lending conditions how do you get inflation? Increases in money velocity will be hard if people are frugal and banks are unwilling to lend as freely as the past.
    Almost everyone is going on about commodities and inflation – it reminds me of the dot com bubble and the new economy theory.
    The time to exit shares was during the early stages of the last bear market…not after crash recovery levels. If inflation is going out of control – as many assume – why pay off debt when it will be worth less in 10 years ;) Better to lock rates, then put the money to work and let inflation deflate your loan book.
    The smart people are gearing atm at low interest rates – taking the near free money and making a killing.
    Interest rates wont be rising for sometime…the RBA projections for inflation are not high and are unlikely to warrant many rises from here. From the recent economic figures the recovery is occuring but at a slower pace than the market was pricing in – all that is occuring now is a discount to allow for an imperfect recovery timeframe.

    Remember the above is not advice, just commentary, seek a financial advisor for info/decisions related to your particular circumstances.

    Reply
  59. Thanks for the considered response, Anon. Very good thoughts.

    Perhaps there won’t be inflation, but I consider it likely because:
    1. Taxes will increase the price of everything
    2. Less volume of sales (and factoring in tax) will mean higher mark-ups in the long run to maintain company profits – higher prices.
    3. Wage pressure will follow the rise in taxes.
    4. Price of energy will rise (both through natural market forces and as a result of taxes).

    This will create a situation where, IMO, money is sucked out of real estate as people are forced to liquidate to make ends meet. Low interest rates will help keep Australian banks in business by reducing defaults, but in the end they may well need bailing out anyway which = yet more taxes.

    I don’t think there is any serious recovery happening, and I think people are underestimating how this financial crisis did real damage to the world economy. Inflation is not always sign of things getting better.

    Reply
  60. Switzerland has even a higher household debt to disposable income, with a ratio about 180 % for year 2008 as indicated in the McKinsey survey 2010

    Reply
  61. “Inflation is not always sign of things getting better.”
    Me thinks that way too Dan.

    Reply
  62. Pertinent point because the opposite view seems to predominate within popular opinion.

    Reply
  63. Steve Keen doing a bit of navel gazing as to if his approach to economics should turn out to be somewhat less than incomplete/wrong, then just who might be right:

    http://www.switzer.com.au/the-experts/steve-keen-economy-expert/its-hard-being-a-bear-part-six-good-alternative-theory/

    It starts off: “If the economy does in fact recover from the Global Financial Crisis—without private debt levels once again rising relative to GDP—then my approach to economics will be proven wrong.”

    Reply
  64. Well, thought I’d chime in with this little gem (which should be a starting point for those free thinkers who have an inclination to check the facts themselves).

    Dress me in a nice tartan blouse and call me Skeptical Sally, but I’ve managed to confirm Lord Monckton’s key claims with just a little digging around.

    Enjoy!

    http://www.youtube.com/watch?v=OzkB5DuveDE

    Reply
  65. Since I am not merely wearing a blouse but my bells are now chiming, how about this little, totally unreported, ‘climate scientist’ conveniently-excluded, little factoid.

    CO2 does indeed go up and down with temperatures, but the CO2 lags temperature rises and falls by about 700 years on average. See the clear evidence from the Vostok, Antarctica ice cores.

    Just see for yourself!

    http://www.classzone.com/books/earth_science/terc/content/investigations/es2105/es2105page06.cfm

    Reply
  66. Thanks wasabu, great posts.

    Reply
  67. Thankyou for saying “Thankyou” Sambo – Yes, What did Winnie say in his usual stentorian tones? – Never have so many, been thanked so often, by so few! – Or somesuch? :)

    Reply
  68. Hey Anon, are you the same Anon who scampered off another site like a kicked dingo dog when you got called over sticking the knife into a fellow blogger behind his back maybe two days ago? Yunno – The site where comments are monitored?

    Got to admit it sounds a bit similar given that you end your post here with “Remember the above is not advice, just commentary, seek a financial advisor for info/decisions related to your particular circumstances”

    And the “other” skuzbucket Anon elsewhere ended its comments with “Remember above is not advice, only commentary – seek advice/info from your local financial advisor” and such like.

    Just curious prozac? :)

    PS: Give my regards to Sambo and MadJak and Bertie and Chunkton and Roy and Fiscal Phil and all your other “friends” of your own imagination.

    Woof, Woof! :)

    Reply
  69. Errata: “friends” of your own imagination => “friends” of your own creation

    Reply
  70. Ah reserve bankers and gangster regulators and the cronies …. beautiful Sydney, take away the christian zealotry and the floggings and it hasn’t changed since Marsden and the military gangsters, except that the cargo that they annex before the heads is now funny money balance sheet fraud derived debt rather than direct title to limited assets.

    http://www.smh.com.au/business/treat-for-elite-as-reserve-bank-celebrates-20100208-nnc5.html

    Reply
  71. Ned S,

    I can confirm to you that I have no link with Anon whatsoever. Whether I agree with him or not on any particular matter would be purely coincidental.

    Reply
  72. Madjak = Prozak? Same number of letters, same number of consonants, same number of vowels? Same viewpoint: akkkk! (‘purely coincidental’?) Ned, I can also confirm that Madjak is not Anon. He is never Anon. His stuff stands out like the proverbial canine’s cojones.

    Reply
  73. Well, since fluoxetine went out of patent, I guess Prozak is appearing under a plethora of unrelated names.

    Reply
  74. I reckoned this place was OK when it was a good natured enough zoo – With the animals sometimes slinging a bit of food at each other. And sometimes a bit of poo. But never any real deep and nasty malice.

    But we’ve got a sicko here now.

    We know a bit about him:

    * He thinks of his mum as a “10 quid pom”
    * And his daddy was a Dutchman
    * He’s based in Britain (London?)
    * He reckons he’s an Aussie – born here?
    * He doesn’t seem too happy about high Oz house prices
    * He reckons his strength is stocks
    * And at the moment, inclines towards a deflationary view
    * He reckons Aussies are a bit thick
    * But that he’s a “smart fellah” (some with sort of training in financial stuff)
    * And that the blokes at Goldman Sachs are worth every dime
    * He reckons Aussies are a bit short on for “cultcha”
    * And that the boomers are getting a bit past it
    * He’s spent some time in Asia
    * He gets his jollies telling fellow bloggers they’d fit nicely under the GLBT banner
    * And from thinking that he’s messing with their heads

    On occassion his mask falls off and he bays at the moon. During which lapses he figures it’s his role in blogdom to decide whose “friendships” are “worthy”. And which should be denigrated.

    And thus felt to feed blogger Dan a little tidbit like “Unfortunately I do care what Dan thinks. Wait, did. He is soon to realise that being “with you” means he can’t go against you. And the more you two discuss things, the more you’re going to get upset Fraudster. Which is good I think. Long live the friendship!”

    He’s got a tendency to twist conversations around:

    P: “Turns out that the older you get, the worse you are at assessing risk.”
    N: “A decent and caring chap will give Warren Buffet and Paul Volcker and George Soros a call on his personal hotline to let them all know they are brain dead old numpties then I guess.”
    P: “Awww, my old mate Ned comparing himself and the fraudster to Warren Buffet.”

    So in amongst that, when I see the site being “sanitised” by a bunch of cultcharred cartoon characters (whom for the most part, Aussies very well may not twig are cartoon characters – to give his ego a kick along about just how superior he is perhaps? – as he figures is the case I reckon), then I smell a recent “Mickey Mouse” type bull[ion] expert at play.

    Chaps like Little Black “Sambo” – Who I just might know was a ‘toon if my mum had been what this bloke reckons his was. With Sambo chipping in regularly to congratulate us all on the wise and wonderful comments.

    Chaps like MadJak – With “Jak” being Dutch of course. And Mad Jack the Pirate being another ‘toon. And MJ recently feeling to say Sorry to his fellow bloggers for being latish with his comment? (Geez – How’s that for the opposite of uncouth! – So “cultcharred” it’s positively refined even!)

    Plus the ubitquitous “Bertie” Beetle … Hmmm.

    Then there are all the apparent “real” pretend prozac morphs that have taken to popping in and out since Penicillin “Pete” has been staying in his box a bit. Blokes who know about Thai condos and the Netherlands ‘n stuff.

    There are other things I could mention. But it really, really is all SO disinteresting!!!

    Such things are coincidental? Well, maybe … But in the absence of “proof”, which is NOT available in a situation like this, my gut instinct says if it’s yellow and quacks and waddles, then it probably really is a duck. And I’d real wary about who I took any “tips” off on this site right now.

    Just my opinion of course. And in a free country we all get to have those. Plus make our own choices about who and what we do and don’t believe/trust!

    Of course it’s always a bit sad if a quail gets hit when one blows away a snake in the long grass. But, like as not the bloody snake would have et the quail anyway I figure?

    Good luck and good health to all! :)

    Reply
  75. Have a cry Ned. The problem is you mate.

    And Dan, I really thought you were smarter than this. All of the people here are unique. Who else but Biker and Ned could be bothered to invest the time?

    You know what they say about assumptions.

    Reply
  76. Ned,

    Once again, I am sorry, but I really must reiterate I have nothing to do with any of these other characters you mention or the axe you’re grinding.

    I can see how people might think my screenname is synonymous with Prozac, but believe me – unless someone else has been using my screenname, I have nothing to do with your spat with whoever it is.

    And no, there is no dutch heritage with me, and no I do not take kindly your incinuation.

    Reply
  77. Madjak, Ned is the one who should be sorry.

    A silly old man who feels haunted. As you can see he is doing the same to dozens of people. Ignore him. Your posts are good and are more than welcome here. It certainly makes a change from the monotony of Ned and Biker babble.

    Reply
  78. Thanks Pete

    Reply
  79. I’m not surprised there are shills / spoilers in a place such as this. Some of the insight offered by the articles here is right on the money and embarrassing to a few – anywhere you get this kind of material on the net there are (paid?) hecklers.

    Reply
  80. Not paid Dan. Plus, since when did I heckle the articles?

    I am beginning to think you are having a lapse of naivety there. Ned chooses to make things complex when they are in fact frightfully simple. Don’t take the lead of the easily led Dan. Ned doesn’t know where he’s going without his mate. He just flounders.

    Think back to ADR before Ned’s arrival. Twas much better. I won’t convince you of that, nor do I care. But you’re wasting your time making these pointless comments born from Ned’s assumptions. You’d be better served spending the effort on your own website.

    Reply
  81. Another kind offer to “bugger off” made to a real person hey prozac? Leopards surely don’t change their spots!

    Reply
  82. Wow, now I see why I don’t visit here too often.

    I am not a paid troll or anything of the sort. And I have better things to do with my time to visit a site where I get caught in a bitchy cat fight of which I have no idea about who it’s about or what it’s about.

    Final word to Ned S

    PUT DOWN THE KOOL AID, pal

    Reply
  83. It’s not normally like this Madjak.

    If you can ignore Ned’s antics you’ll have no problems here – the others are good value. Even Dan is a good egg, just not sure why he stepped into this (maybe he is bored).

    Reply
  84. Pete,

    I have no doubt. And yes, I will be back and will comment on things I believe I can contribute constructively to.

    I don’t comment often, but I was intrigued why he targeted me, reading back through the thread I can tell he was trying to bait me earlier on using the keyword MJ, which I missed.

    Ned S, ok, you got me, I am Osama Bin Ladens love child with George W Bushes Cat. Put that into your paranoid musings. Keep working on it mate and you might end up with the ramblings of a madman.

    From here on in, Ned S is strictly on my ignore list.

    Reply
  85. MadJak (“Jak” I repeat. :) Who says above “there is no dutch heritage with me”) dug up the English version of the Netherlands Radio Worldwide report (in this same thread above on 5 Feb) as to how much of the Netherlands is below sea level:

    http://www.rnw.nl/english/article/error-dutch-polder-data-undermines-trust-ipcc

    Coincidental? Hmmm???

    Reply
  86. I can’t let this one go.

    So someone providing an english link to a Dutch location with Jak in the name must be dutch.

    You’re a freak mate.

    Reply
  87. A repeat of lengthy comment above if you’ve already read it – But just so a few more may get my little APB …

    I reckoned this place was OK when it was a good natured enough zoo – With the animals sometimes slinging a bit of food at each other. And sometimes a bit of poo. But never any real deep and nasty malice.

    But we’ve got a sicko here now.

    We know a bit about him:

    * He thinks of his mum as a “10 quid pom”
    * And his daddy was a Dutchman
    * He’s based in Britain (London?)
    * He reckons he’s an Aussie – born here?
    * He doesn’t seem too happy about high Oz house prices
    * He reckons his strength is stocks
    * And at the moment, inclines towards a deflationary view
    * He reckons Aussies are a bit thick
    * But that he’s a “smart fellah” (some with sort of training in financial stuff)
    * And that the blokes at Goldman Sachs are worth every dime
    * He reckons Aussies are a bit short on for “cultcha”
    * And that the boomers are getting a bit past it
    * He’s spent some time in Asia
    * He gets his jollies telling fellow bloggers they’d fit nicely under the GLBT banner
    * And from thinking that he’s messing with their heads

    On occassion his mask falls off and he bays at the moon. During which lapses he figures it’s his role in blogdom to decide whose “friendships” are “worthy”. And which should be denigrated.

    And thus felt to feed blogger Dan a little tidbit like “Unfortunately I do care what Dan thinks. Wait, did. He is soon to realise that being “with you” means he can’t go against you. And the more you two discuss things, the more you’re going to get upset Fraudster. Which is good I think. Long live the friendship!”

    He’s got a tendency to twist conversations around:

    P: “Turns out that the older you get, the worse you are at assessing risk.”
    N: “A decent and caring chap will give Warren Buffet and Paul Volcker and George Soros a call on his personal hotline to let them all know they are brain dead old numpties then I guess.”
    P: “Awww, my old mate Ned comparing himself and the fraudster to Warren Buffet.”

    So in amongst that, when I see the site being “sanitised” by a bunch of cultcharred cartoon characters (whom for the most part, Aussies very well may not twig are cartoon characters – to give his ego a kick along about just how superior he is perhaps? – as he figures is the case I reckon), then I smell a recent “Mickey Mouse” type bull[ion] expert at play.

    Chaps like Little Black “Sambo” – Who I just might know was a ‘toon if my mum had been what this bloke reckons his was. With Sambo chipping in regularly to congratulate us all on the wise and wonderful comments.

    Chaps like MadJak – With “Jak” being Dutch of course. And Mad Jack the Pirate being another ‘toon. And MJ recently feeling to say Sorry to his fellow bloggers for being latish with his comment? (Geez – How’s that for the opposite of uncouth! – So “cultcharred” it’s positively refined even!)

    Plus the ubitquitous “Bertie” Beetle … Hmmm.

    Then there are all the apparent “real” pretend prozac morphs that have taken to popping in and out since Penicillin “Pete” has been staying in his box a bit. Blokes who know about Thai condos and the Netherlands ‘n stuff.

    There are other things I could mention. But it really, really is all SO disinteresting!!!

    Such things are coincidental? Well, maybe … But in the absence of “proof”, which is NOT available in a situation like this, my gut instinct says if it’s yellow and quacks and waddles, then it probably really is a duck. And I’d real wary about who I took any “tips” off on this site right now.

    Just my opinion of course. And in a free country we all get to have those. Plus make our own choices about who and what we do and don’t believe/trust!

    Of course it’s always a bit sad if a quail gets hit when one blows away a snake in the long grass. But, like as not the bloody snake would have et the quail anyway I figure?

    Good luck and good health to all! :)

    Reply
  88. Don’t get cranky MadJak – I’m just making a few polite comments without saying any nasty words! :)

    Reply
  89. Guy: “Switzerland has even a higher household debt to disposable income, with a ratio about 180 % for year 2008 as indicated in the McKinsey survey 2010.”

    Spent a month in Switzerland in late 2005, Guy. Very impressed with all aspects of their lifestyle and economy. How have they been faring since the GFC? Good decision rejecting the European Union, especially since many of its members are financially defunct… (?)

    Reply
  90. Ned S,
    I have tried to correct you, but you keep piecing together that conspiracy there mate.

    I have tried to help you. You have chosen to ignorantly stick to your opinion of me and to attack my character using baseless claims.

    I pity the poor souls who have to suffer you indeterminable ramblings and paranoia.

    NedSisSenile
    February 9, 2010
    Reply
  91. Bunch of tossing convict wogs.
    A_wog is defined as A_nyone_West_Of_Greater europe.
    A wog, ‘awog’.
    England, britain, great britain, scotland, wales and their convict outcast tossers, whatever.
    Think the chinese have forgoten the opium wars?
    Surprises are a coming.
    The show is about to begin.

    Reply
  92. NV might be representing the U in STUPID but he might be right that what goes around comes around. I like the Chinese when we get past chauvinism and onto business or a laugh.

    Reply
  93. “Pete”: “All of the people here are unique.”

    Quite so – With quite a few unique, IMAGINARY characters amongst them. Who also have a bad habit of “taking the piss” with their investment related comments (just to prove once again to their creator what a “smart fellah” investment wise he is I fully suspect):

    Mickey Mouse: (MICKEY BLINKIN’BLOODY MOUSE!!! :) ) On gold; And how silly he is; While still being keen to tell us all how much he knows about the trillions of debt globally etc, AND pose the real challenge question to the gold bulls amongst us as to just what might happen to gold in a deflationary situation? Ending with “It is clearly obvious that I am not a great financial mind (what kind of clown would’ve bought gold in early 2009), but things might be better out here in Disneyland if you could tell me a good story about gold and deflation.” Talk about a setup for a self styled “smart fellah” to munch up any taker and spit them out – Not nice prozac, not nice at all! (NO smiley face)

    http://www.dailyreckoning.com.au/the-descent-of-money/2010/02/01/

    Chunkton: I want to sell you my Thai condo I’m earning 10% on or some such? Huh???

    MadJak: Buy a pallet of Aussie snow chains I reckon? HUH???

    Seriously prozac, you can’t want me to dig up all the actual comments your imaginary “friends” wrote trying to belittle Aussies surely? Every one I drag out simply adds to the body of evidence against your protestations of innocence??? And if there is one thing I KNOW about liars, it is that they HATE being proved liars – Not that anything can be “proved” here except in so far as you might trap yourself with your own words – But that’s a moving bloody target when you are every man and his brown dog! Irrespective, a body of evidence DOES accumulate. To be considered by any and all who might be interested.

    *****************************************************************

    “Pete” again: “Who else but Biker and Ned could be bothered to invest the time?”

    Anyone who has the time and truly values honesty PLUS doesn’t warm to the concept of someone who has heaps of time and figures he’s a “smart fellah” trying to belittle his polite, albeit undoubtedly somewhat suspicious fellow Australians en masse when they truly don’t have the time to sus out their suspicions!

    Reply
  94. Its me Roy here, no-one else. Nice post biker, (Switzerland is a beautiful country) so what would you think is the max household debt ratio before it effects the ongoing economy and or the debtor. Or do you think debt levels don’t matter to the economy or individual?.

    I would also throw in I think its important to look at where the credit comes from. Japan has shown that it can run up huge debts and have low interest rates if the debt is being funded from within the country (savings). Personally looking at Japans falling savings rate it obvious their ability to fund their own spending (from within their country) is about to stop. Will non Japanese accept the same interest rates as the government pays its own citizens – I doubt it very much. Australia is of course a net importer of capital, hence the govt guarantee on borrowing to our banks.

    Personally I think its about servicing the debt, if the debt is “good debt” (self extinguishing from yield or savings made) then in reality the debt level doesn’t matter (its self funding – depending on interest rates). However if debt is just a drag on income (it costs the debtor from their own cash flow) then their must be a natural limit before the entire cash flow is being used on interest. Of course should you have debt which you can manage (whether good debt or not) then interest rates will be the big deciding factor on what ratio of debt to income is serviceable.

    I think the more important point here is what is the debt being used for productive investment, non productive speculation or consumption.

    Its credit that has driven asset prices up in my opinion it will be credit (the lack of or changing credit providers risk appetite) to reverse the process. You only have to look through history, extended credit booms always end with the credit providers having a MINSKY moment.

    Reply
  95. Jeez … You sure are a “smart fellah” Roy! Please tell prozac that Heck I’m impressed. :)

    Reply
  96. Haha Ned, you are so far out of your tree buddy :)

    Roy, nevermind crazy old Ned, senility has come early.

    Reply
  97. “Bunch of tossing convict wogs” :) :) :) – Thanks prozac – I’ll try to remember! It’s definitely a step up on “Skippies”! :)

    Reply
  98. Pete, thank you. Yes I tend just to ignore the bulls%$t. Hence I only read about half the posts here and certainly never lower myself to the lowest common denominator on sites like this.

    Cant remember where I read this but I think this is a great rule to live by. “The best way to win an argument with a fool is to ignore them”.

    Reply
  99. Hey fellahs – A unique and totally original thought just occurred to me. Just say there was someone on this site operating under lots of names; Not that anyone can say “that” for sure of course :), do you think it could be possible he could be using his spare names to mark a few comments like he wanted them marked?

    Nah, couldn’t be – Only someone who was a bit unethical would do that! :) :) :)

    Reply
  100. Second repeat of lengthy comment above if you’ve already read it – But just so a few more may get my little APB …

    I reckoned this place was OK when it was a good natured enough zoo – With the animals sometimes slinging a bit of food at each other. And sometimes a bit of poo. But never any real deep and nasty malice.

    But we’ve got a sicko here now.

    We know a bit about him:

    * He thinks of his mum as a “10 quid pom”
    * And his daddy was a Dutchman
    * He’s based in Britain (London?)
    * He reckons he’s an Aussie – born here?
    * He doesn’t seem too happy about high Oz house prices
    * He reckons his strength is stocks
    * And at the moment, inclines towards a deflationary view
    * He reckons Aussies are a bit thick
    * But that he’s a “smart fellah” (some with sort of training in financial stuff)
    * And that the blokes at Goldman Sachs are worth every dime
    * He reckons Aussies are a bit short on for “cultcha”
    * And that the boomers are getting a bit past it
    * He’s spent some time in Asia
    * He gets his jollies telling fellow bloggers they’d fit nicely under the GLBT banner
    * And from thinking that he’s messing with their heads

    On occassion his mask falls off and he bays at the moon. During which lapses he figures it’s his role in blogdom to decide whose “friendships” are “worthy”. And which should be denigrated.

    And thus felt to feed blogger Dan a little tidbit like “Unfortunately I do care what Dan thinks. Wait, did. He is soon to realise that being “with you” means he can’t go against you. And the more you two discuss things, the more you’re going to get upset Fraudster. Which is good I think. Long live the friendship!”

    He’s got a tendency to twist conversations around:

    P: “Turns out that the older you get, the worse you are at assessing risk.”
    N: “A decent and caring chap will give Warren Buffet and Paul Volcker and George Soros a call on his personal hotline to let them all know they are brain dead old numpties then I guess.”
    P: “Awww, my old mate Ned comparing himself and the fraudster to Warren Buffet.”

    So in amongst that, when I see the site being “sanitised” by a bunch of cultcharred cartoon characters (whom for the most part, Aussies very well may not twig are cartoon characters – to give his ego a kick along about just how superior he is perhaps? – as he figures is the case I reckon), then I smell a recent “Mickey Mouse” type bull[ion] expert at play.

    Chaps like Little Black “Sambo” – Who I just might know was a ‘toon if my mum had been what this bloke reckons his was. With Sambo chipping in regularly to congratulate us all on the wise and wonderful comments.

    Chaps like MadJak – With “Jak” being Dutch of course. And Mad Jack the Pirate being another ‘toon. And MJ recently feeling to say Sorry to his fellow bloggers for being latish with his comment? (Geez – How’s that for the opposite of uncouth! – So “cultcharred” it’s positively refined even!)

    Plus the ubitquitous “Bertie” Beetle … Hmmm.

    Then there are all the apparent “real” pretend prozac morphs that have taken to popping in and out since Penicillin “Pete” has been staying in his box a bit. Blokes who know about Thai condos and the Netherlands ‘n stuff.

    There are other things I could mention. But it really, really is all SO disinteresting!!!

    Such things are coincidental? Well, maybe … But in the absence of “proof”, which is NOT available in a situation like this, my gut instinct says if it’s yellow and quacks and waddles, then it probably really is a duck. And I’d real wary about who I took any “tips” off on this site right now.

    Just my opinion of course. And in a free country we all get to have those. Plus make our own choices about who and what we do and don’t believe/trust!

    Of course it’s always a bit sad if a quail gets hit when one blows away a snake in the long grass. But, like as not the bloody snake would have et the quail anyway I figure?

    Good luck and good health to all! :)

    Reply
  101. Prozak at 78… who’d have thought fluoxetine could preserve and propel him through so many morphs for four decades, to this final older, no wiser chrysalis? Your definition of ‘good’ and ‘bad’ debt are childlike in their simplicity, ‘Roy’. I’d suggest that rather than enjoying a Minsky’s Moment, you’re experiencing the onset of dementia… a premature Seniors Moment, the result of ignoring specialist medical advice. Have you googled the likely side effects of your prescribed medication, son? Would you like me to list them online for you, perhaps?

    Reply
  102. Nah, prozac isn’t 78 mate – You’re thinking of his Fiscal Phil morph – With them being totally unique characters as he assures us from the depths of his totally unquestionable personal integrity. :) :) :) I’d put prozac at late 30s myself maybe? Although that’s just a guess – I’d have to do a bit of research to get closer perhaps? :)

    Reply
  103. The abuse is very childish, Biker. I suppose those without an answer always turn to abuse.
    Sorry I thought you may be one who would like to engage in some adult intellectual debate. Alas you may be in the other camp (see my comment above).

    I’m sure I’m not alone in waiting with baited breath to your explanation of good and bad debt and what is investment and what is speculation.

    I’m sorry I must be a little slow what is the prozac joke, I’ve never taken it.

    Reply
  104. Good to see you back Roy – Now you can provide your source for your statement that migrants have less than $20k on average. As requested by Biker last before you vanished into smoke. I distinctly recall him saying something like “a link will do” – Despite the fact that I’m regularly told I’m senile … :)

    Reply
  105. ‘Roy’ is 78, Ned. So I added four decades. Fiscal Fool? Don’t know how old the FF is… . When you created him, how old did you _imagine_ him to be, Pill Boy?

    Good point about the source of Prozak’s $20K migrants though. ‘Roy’ never did come back with that info, did he? BTW, did you read the news about Australian Immigration retaining 108,000 immigrants per year, but _only_ accepting the doctors, dentists, engineers, etc from now on? Another nail in property’s coffin, I guess?!!~ ;)

    Reply
  106. “Roy” (to Biker above): “I’m sure I’m not alone in waiting with baited breath to your explanation of good and bad debt and what is investment and what is speculation.”

    They chatted about such stuff in your “Ethics of Investment and Speculation 101” studies did they mate? Why don’t you enlighten all us poor ignorant Aussie numpties.

    Like, Geez, why ask Biker – He’s never pretended to be anything other than what he is – Namely an Aussie who’s had a few wins on property???

    Come on “Roy” … Show us your stuff! :) :) :)

    Reply
  107. So, in summary, are house prices going to go up, or down?

    Reply
  108. So it’s “Roy” who is 78 and NOT “Fiscal Phil”??? Damn! I got one wrong!!! I really HATE that! :)

    Nevermind, if “Roy” has his $20k link at hand and can regurgitate his “Ethics of Investment and Speculation 101” studies all over me, the evening mightn’t have been wasted … Oh “Roy”, Oh “Roy”, Wherefore art thou Coy Runaway Roy??? :) :) :)

    Reply
  109. Dan: “So, in summary, are house prices going to go up, or down?”

    Geez Dan, are you worried he might chuck a wobbly? I considered that once. As did Biker. Doubt it!!!

    Reply
  110. Third repeat of lengthy comment above if you’ve already read it – Tiresome I know! But so as few as possible miss this APB …

    I reckoned this place was OK when it was a good natured enough zoo – With the animals sometimes slinging a bit of food at each other. And sometimes a bit of poo. But never any real deep and nasty malice.

    But we’ve got a sicko here now.

    We know a bit about him:

    * He thinks of his mum as a “10 quid pom”
    * And his daddy was a Dutchman
    * He’s based in Britain (London?)
    * He reckons he’s an Aussie – born here?
    * He doesn’t seem too happy about high Oz house prices
    * He reckons his strength is stocks
    * And at the moment, inclines towards a deflationary view
    * He reckons Aussies are a bit thick
    * But that he’s a “smart fellah” (some with sort of training in financial stuff)
    * And that the blokes at Goldman Sachs are worth every dime
    * He reckons Aussies are a bit short on for “cultcha”
    * And that the boomers are getting a bit past it
    * He’s spent some time in Asia
    * He gets his jollies telling fellow bloggers they’d fit nicely under the GLBT banner
    * And from thinking that he’s messing with their heads

    On occassion his mask falls off and he bays at the moon. During which lapses he figures it’s his role in blogdom to decide whose “friendships” are “worthy”. And which should be denigrated.

    And thus felt to feed blogger Dan a little tidbit like “Unfortunately I do care what Dan thinks. Wait, did. He is soon to realise that being “with you” means he can’t go against you. And the more you two discuss things, the more you’re going to get upset Fraudster. Which is good I think. Long live the friendship!”

    He’s got a tendency to twist conversations around:

    P: “Turns out that the older you get, the worse you are at assessing risk.”
    N: “A decent and caring chap will give Warren Buffet and Paul Volcker and George Soros a call on his personal hotline to let them all know they are brain dead old numpties then I guess.”
    P: “Awww, my old mate Ned comparing himself and the fraudster to Warren Buffet.”

    So in amongst that, when I see the site being “sanitised” by a bunch of cultcharred cartoon characters (whom for the most part, Aussies very well may not twig are cartoon characters – to give his ego a kick along about just how superior he is perhaps? – as he figures is the case I reckon), then I smell a recent “Mickey Mouse” type bull[ion] expert at play.

    Chaps like Little Black “Sambo” – Who I just might know was a ‘toon if my mum had been what this bloke reckons his was. With Sambo chipping in regularly to congratulate us all on the wise and wonderful comments.

    Chaps like MadJak – With “Jak” being Dutch of course. And Mad Jack the Pirate being another ‘toon. And MJ recently feeling to say Sorry to his fellow bloggers for being latish with his comment? (Geez – How’s that for the opposite of uncouth! – So “cultcharred” it’s positively refined even!)

    Plus the ubitquitous “Bertie” Beetle … Hmmm.

    Then there are all the apparent “real” pretend prozac morphs that have taken to popping in and out since Penicillin “Pete” has been staying in his box a bit. Blokes who know about Thai condos and the Netherlands ‘n stuff.

    There are other things I could mention. But it really, really is all SO disinteresting!!!

    Such things are coincidental? Well, maybe … But in the absence of “proof”, which is NOT available in a situation like this, my gut instinct says if it’s yellow and quacks and waddles, then it probably really is a duck. And I’d real wary about who I took any “tips” off on this site right now.

    Just my opinion of course. And in a free country we all get to have those. Plus make our own choices about who and what we do and don’t believe/trust!

    Of course it’s always a bit sad if a quail gets hit when one blows away a snake in the long grass. But, like as not the bloody snake would have et the quail anyway I figure?

    Good luck and good health to all! :)

    Reply
  111. Yep, just for the ‘record’, when Prozak’s wailing, he’s 33-and-a-third… and ‘Roy’ is 78. Fiscal Fool is probably the 45rpm version. With Pill Boy, it’s _all_ drugs and rock ‘n’ roll. No sex, please, he’s British (and pretty perverse with it, from his past posts.)

    Reply
  112. This is George Bushes Cat here,

    I can confirm MadJaks comments earlier, it is a night I regret.

    Reply
  113. Still “waiting with baited breath for your explanation…” of your source of the statement that immigrants arrive with just $20,000.00, ‘Roy’…

    A reminder that Woody Allen noted: “94.5% of statistics are made up.”
    Note good enough, mate…

    Reply
  114. Dan, I found the recent Demograhia report useful – It quite specifically identifies the reason behind high Australian house prices on page 26 :

    http://www.demographia.com/dhi.pdf

    It’s an interesting one politically. In that the commonwealth seems to be the ones that wear the fallout from it – Due to people tying interest rates to them (rightly or wrongly). Whereas the real issue (in Australia) is way more at the state and local government levels.

    Reply
  115. Fascinating read, Ned. Thanks. Particularly found p. 36 enlightening. We’ve long suspected it worked that way. Interesting to have it confirmed. An optimist might hope that planning departments, including Main Roads, Water, etc., are the reason it works that way.

    Mortgage stress issues are always a factor in property values, so it was a surprise to read this report, this morning:
    http://www.watoday.com.au/business/cba-profit-soars-as-bad-debts-drop-20100210-nq8y.html

    Reply
  116. Re-Sent: Should have read:

    Particularly found p. 29, on the Perth situation, enlightening. We’ve long suspected it worked that way. Interesting to have it confirmed. An optimist might hope that planning departments, including Main Roads, Water Dept, etc., are the reason it works that way.

    Mortgage stress issues are always a factor in property values, so it was a surprise to read this report, this morning: http://www.watoday.com.au/business/cba-profit-soars-as-bad-debts-drop-20100210-nq8y.html

    Reply
  117. I also found the alternative Chartalism view that Keen recently highlighted “fascinating”. I’ve looked through the article a few times now and wouldn’t pretend to have gone close to getting my head around it. But, I find stuff like the following fascinating regardless:

    “We often read that the appropriate fiscal stance is to balance the federal budget over the business cycle. Some economists claim the goals should be to run a surplus on average over the cycle allowing for deficits in extreme downturns. Both goals would be fiscally irresponsible in Australia’s situation where our current account is typically in deficit.”

    Followed shortly thereafter by:

    “In other words, adopting a growth strategy that relies on increasingly leveraging the private sector is unsustainable. The only way the private domestic sector can save if there is a current account deficit is for the government sector to run deficits up to the desired private saving. Government deficits “finance” private saving by ensuring that aggregate spending is sufficient to generate the level of output and income that will bring forth the private desired saving levels.”

    And a bit further down, it raises the question: “How large should the deficit be?” and goes on to state: “Unlike the mainstream rhetoric, insolvency is never an issue with deficits. The only danger with fiscal policy is inflation which would arise if the government pushed nominal spending growth above the real capacity of the economy to absorb it.”

    Plus further down: “The reality is, however, that the neo-liberal era has forced the governments to adopt voluntary constraints on its fiscal activity, which are tantamount to those that operated during the gold standard period.”

    And ends with: “Modern monetary theory provides a sound basis for understanding the intrinsic opportunities available to governments in a fiat monetary system and exposes most of the constraints that are imposed on the conduct of fiscal policy as being of an ideological origin.”

    http://www.switzer.com.au/the-experts/steve-keen-economy-expert/its-hard-being-a-bear-part-six-good-alternative-theory/

    Reply
  118. Most telling are the three responses to Keen’s mea culpa, Ned:

    “Wow, that was a shitload of terminology that told me nothing. Thanks.”

    AND

    “I have never read so much gobblde goop nonsensical bullshit in my whole life. I believe this man made an honest mistake and a bad call a year ago that cost him some money and embarrassment but for God sake just admit it and get on with the good fight. Everyone makes mistakes”

    AND

    “I completely agree with both the comments from “Name” & “peter hutton”…. Did anyone understand anything out of his articles?”

    I haven’t commented, myself. I thought these three respondents covered the doublespeak situation well.

    Reply
  119. Basing one’s financial future on the assumption that ANY particular school of economic thought may be “right” seems like it’s an inherently risky strategy in itself to me – Given that the art still appears to have a few things to come to grips with … His haemorrhoids are playing up again doc – Do you reckon we should bleed him? Or feed him (some powdered toad toenails maybe?) Or stick him with a pin! :)

    I thought “Judy Rodgers” comment was a bit of good fun – She reckons what he did should be “punishable” … I reckon it would be better to just say that allowing free speech has its potential downsides as well as upsides. :( … :)

    Reply
  120. Doubt anyone’s reading this far down, but what I find telling in the analysis done by DR versus the political spin is that DR talks about AUSTRALIAN debt (sovereign and otherwise), since the whole picture has to be in view in order to have any idea, while the pollies and media talk about Sovereign debt only, seemingly deliberately, save Barny!!!! (Baaarny Baaarny Baaaarny)

    What gives? If aussie battlers default the country defaults right?

    Reply
  121. Australians are among the most ignorant people I’ve come across, when it comes to understanding of world events – not by their own fault, but by the poor quality of the public media. Hopefully it’s changing with the Internet.

    Reply
  122. I thought the following was well worth a read, given that it comes from the “Chartalist” school and in Keen’s words “if there is a genuine recovery not involving rising private debt to GDP levels, then Chartalism is the only theory left standing.” :

    “We often read that the appropriate fiscal stance is to balance the federal budget over the business cycle. Some economists claim the goals should be to run a surplus on average over the cycle allowing for deficits in extreme downturns. Both goals would be fiscally irresponsible in Australia’s situation where our current account is typically in deficit. If the government balanced the budget on average and the current account deficit was in deficit over the business cycle then the private domestic sector would on average be in deficit (dis-saving) over that cycle. The decreasing levels of net private savings financing the government surplus increasingly leverage the private sector. The deteriorating debt to income ratios which result will eventually see the system succumb to ongoing demand-draining fiscal drag through a slow-down in real activity.

    In other words, adopting a growth strategy that relies on increasingly leveraging the private sector is unsustainable. The only way the private domestic sector can save if there is a current account deficit is for the government sector to run deficits up to the desired private saving. Government deficits “finance” private saving by ensuring that aggregate spending is sufficient to generate the level of output and income that will bring forth the private desired saving levels.”

    http://www.switzer.com.au/the-experts/steve-keen-economy-expert/its-hard-being-a-bear-part-six-good-alternative-theory/

    Reply
  123. Steve Keen’s Disclaimer: “Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.”

    Hadn’t noticed this disclaimer previously, Ned. Is it possible it has been added recently… or did I miss it the first time? I’m surprised no-one before Judy Rodgers has raised the legal issue of “punishable” advice previously… .

    Reply
  124. no body knows how to correctly run a government(don’t need a triple iq to work that out) some countries have massive external dept and little federal dept.Aust s federal dept is below world average and the economy is one of the best.our quality of life is second on the planet beat that world.our pollution per cap is not first.chinas dept is only 500billion (population?)
    countries like turkey china and third world countries have noticed drops in their dept new z is the best on earth corruption last on earth oz will always be first world china and Idia Vienam will get there acts together
    banks much safer than Greece Italy Spain Portugal Usa our government not in recesion Greece Italy Spain will age the most wont be able to pay it back mssive 18 000 000 000 000 000 deficit
    as if your countries can afford climate change just a couble of billion 100 billion some countries
    depresion is on its way any way caused by Greece Italy Spain Portugal Usa share the blame chine ind and hebs have the best work forces
    highest iq s
    most important thing
    http://www.visualeconomics.com/gdp-vs-national-debt-by-country/

    Some selected levels of Public Sector debt in different countries

    US Gross Debt 2008 12,867.5bn 90.8% of GDP (EST) (US Debt)
    Japan National Debt 192% of GDP 2009 est) 836,521 trillion yen 2007
    Italy National Debt 115% of GDP (FT)
    UK National Debt 68% of GDP (UK)

    Other selected Levels of Public Debt as a % of GDP from 2009 est

    1 Zimbabwe 304.30 %
    2 Japan 192.10
    3 Saint Kitts and Nevis 185.00
    4 Lebanon 160.10
    5 Jamaica 131.70
    6 Singapore 117.60
    7 Italy 115.20
    8 Greece 108.10
    9 Sudan 104.50
    10 Iceland 100.60
    11 Belgium 99.00
    12 Nicaragua 87.00
    13 Israel 83.90
    14 Sri Lanka 82.90
    15 Egypt 79.80
    16 France 79.70
    17 Germany 77.20
    18 Portugal 75.20
    19 Hungary 72.40
    20 Canada 72.30
    21 Jordan 69.90
    22 United Kingdom 68.50
    23 Austria 68.20
    24 Ghana 67.50
    25 Malta 66.20
    26 Cote d’Ivoire 63.80
    27 Ireland 63.70
    28 Netherlands 62.30
    29 Philippines 62.30
    30 Norway 60.20
    31 India 60.10
    32 Spain 59.50
    33 Uruguay 58.70
    34 Mauritius 58.30
    35 Malawi 58.00
    36 Bhutan 57.80
    37 El Salvador 55.40
    38 Albania 54.90
    39 Kenya 54.10
    40 Morocco 54.10
    41 Tunisia 53.80
    42 World 53.60
    42 World 53.60
    42 World 53.60
    42 World 53.60
    42 World 53.60
    42 World 53.60
    42 World 53.60
    42 World 53.60
    43 Cyprus 52.40
    44 Vietnam 52.30
    45 Panama 49.50
    46 Thailand 49.40
    47 Costa Rica 49.30
    48 Argentina 49.10
    49 Turkey 48.50
    50 Malaysia 47.80
    51 Croatia 47.70
    52 Poland 47.50
    53 United Arab Emirates 47.20
    54 Brazil 46.80
    55 Finland 46.60
    56 Aruba 46.30
    57 Colombia 46.10
    58 Pakistan 45.30
    59 Bolivia 44.00
    60 Seychelles 43.90
    61 Switzerland 43.50
    62 Sweden 43.20
    63 Bosnia and Herzegovina 43.00
    64 Mexico 42.60
    65 Dominican Republic 41.50
    66 United States 39.70
    67 Yemen 39.60
    68 Bangladesh 38.20
    69 Denmark 38.10
    70 Montenegro 38.00
    71 Serbia 37.00
    72 South Africa 35.70
    73 Cuba 34.80
    74 Gabon 34.70
    75 Slovakia 34.60
    76 Taiwan 34.60
    77 Papua New Guinea 33.70
    78 Czech Republic 32.80
    79 Guatemala 32.70
    80 Latvia 32.50
    81 Ecuador 32.30
    82 Syria 32.30
    83 Ethiopia 31.70
    84 Zambia 31.50
    85 Slovenia 31.40
    86 Lithuania 31.30
    87 Moldova 31.30
    88 Bahrain 30.10
    89 Indonesia 29.80
    90 New Zealand 29.30
    91 Korea, South 28.00
    92 Trinidad and Tobago 26.70
    93 Mozambique 26.10
    94 Peru 26.10
    95 Tanzania 24.80
    96 Macedonia 24.50
    97 Honduras 24.30
    98 Senegal 24.00
    99 Paraguay 22.10
    100 Bulgaria 21.40
    101 Ukraine 20.70
    102 Saudi Arabia 20.30
    103 Romania 20.00
    104 Iran 19.40
    105 Venezuela 19.40
    106 Uganda 19.30
    107 Namibia 19.10
    108 Australia 18.60
    109 China 18.20
    110 Hong Kong 18.10
    111 Botswana 17.90
    112 Nigeria 17.80
    113 Angola 16.80
    114 Gibraltar 15.70
    115 Luxembourg 14.50
    116 Cameroon 14.30
    117 Kazakhstan 14.00
    118 Uzbekistan 11.70
    119 Algeria 10.70
    120 Chile 9.00
    121 Kuwait 8.20
    122 Estonia 7.50
    123 Qatar 7.10
    124 Russia 6.90
    125 Libya 6.50
    126 Wallis and Futuna 5.60
    127 Azerbaijan 4.60
    128 Oman 2.80
    129 Equatorial Guinea 1.10

    Source: CIA factbook – National debt by Country

    Notes: Japan’s Public sector debt is very high. However, Japan has a high savings rate which makes it easier for the government to finance the debt. 90% of Japanese debt is owned by Japanese individuals. US has a low savings ratio and 25% of US debt is owned by foreigners. Nevertheless the National Debt of Japan is a real burden for the economy

    An important factor is not just cumulative national debt, but, the annual budget deficit. This annual deficit determines the rate of deterioration in the public sector debt.

    In the above list, the UNited States debt is given at just below 40% of national debt. But, a more commonly used statistics is gross government debt which stands at close to 90% of GDP
    900% in the future 2060 caused by obama

    65 Trillion – U.S. Financial Obligations Exceed The Entire World’s GDP
    17
    Saturday, February 14, 2009
    Real Debt? 65 TRILLION DOLLARS: Economist

    Excerpt:
    As the Obama administration pushes through Congress its $800 billion deficit-spending economic stimulus plan, the American public is largely unaware that the true deficit of the federal government already is measured in trillions of dollars, and in fact its $65.5 trillion in total obligations exceeds the gross domestic product of the world.

    The total U.S. obligations, including Social Security and Medicare benefits to be paid in the future, effectively have placed the U.S. government in bankruptcy, even before new continuing social welfare obligation embedded in the massive spending plan are taken into account.

    The real 2008 federal budget deficit was $5.1 trillion, not the $455 billion previously reported by the Congressional Budget Office, according to the “2008 Financial Report of the United States Government” as released by the U.S. Department of Treasury.

    The difference between the $455 billion “official” budget deficit numbers and the $5.1 trillion budget deficit cited by “2008 Financial Report of the United States Government” is that the official budget deficit is calculated on a cash basis, where all tax receipts, including Social Security tax receipts, are used to pay government liabilities as they occur.
    “The federal government is bankrupt,” Williams told WND. “In a post-Enron world, if the federal government were a corporation such as General Motors, the president and senior Treasury officers would be in federal penitentiary.”

    But is it good debt or bad debt?

    I’m in hock for my Ph.D…pretty bad hock.

    Then there’s my house…which is an investment as well…sorta…well…real estate used to be.

    Corey
    February 7, 2008
    at 4:31 pm
    Log in to Reply
    2
    Surprising list. Do you know to what extent the countries at the top subsidize home ownership? Or are mortgages not included in consumer debt?

    Caneton
    February 8, 2008
    at 7:22 am
    Log in to Reply
    3
    Mortgages are included in the household debt totals. Denmark and the Netherlands do both have mortgage interest tax deductions, but I don’t think they’re any more generous than in the U.S. I’m pretty sure the UK and Australia got rid of their mortgage interest deductions a few years ago.

    So what’s the cause? I do know that in the Netherlands at least, real estate is seriously expensive. For the same reason that it’s expensive in the San Francisco Bay area–there aren’t many places left to build, and the local authorities aren’t what you’d call pro-development. I wouldn’t be surprised if the debt/income ratio for the Bay area is 300+%. Which doesn’t mean people in the Bay area are worse off than those in, say, Youngstown, Ohio, where the houses cost one-tenth as much.

    Justin Fox
    February 8, 2008
    at 11:09 am
    Log in to Reply
    4
    Iiiiiinteresting.

    So the Netherlands high debt to income ratio may reflect housing costs more than anything else. Given what little I know, that seems to me to be more along the lines of “good” debt as opposed to bad debt like credit cards or car loans.

    Corey
    February 8, 2008
    at 11:25 am
    Log in to Reply
    5
    To confirm JF: UK got rid of the mortgage subsidy around 97 or 98ish…I was there

    That Anonymous…
    February 8, 2008
    at 2:10 pm
    Log in to Reply
    6
    oh ya and london is seriously expensive too..when I moved back i traded a 985 sq ft apartment for a 2400sq ft + unfinished basement house in NY, both in the inner outer burbs of the metro area. Price differential – about $100k 3 years ago – at current rates they’d prob cost about the same..

    And wages are typically lower than in US. My father always used to be amazed when he visited when he would look at the jobs listed in the window at the temp agencies/job markets and the house prices next door.

    That Anonymous…
    February 8, 2008
    at 2:14 pm
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    7
    I wonder how the various average interest rates on those debts differ from country to country.

    SpotWeld
    February 11, 2008
    at 10:09 am
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    8
    Seems like bubble may be getting ready to burst…

    Franchise Opportunities, Australia

    web design
    February 27, 2008
    at 5:27 am
    Log in to Reply
    9
    Opps. unbelievable, this much of variations in Global world debt rates, how a country can survive with lower economy. Many of my friends often talk about good debt consolidation company, i realize now. why they need it so much and curious to know about.
    Georgia Mountain Real Estate

    North GA Real…
    September 22, 2008
    at 10:02 pm
    Log in to Reply
    10
    Thank you for the heads up.
    But you didn’t mentioned Zimbabw, in current situation this country has the most unstable economy. Inflation rates in thousands of counts.
    Web Development India

    Read more: http://curiouscapitalist.blogs.time.com/2008/02/07/americans_arent_the_only_peopl/#ixzz0m1qRsWUt

    Reply
  125. Its pretty obvous tht no matter wht Usa economy and all the other develop countries are headed for a serous economical downtowrn due to the retirement of the baby boomers in the upcoming decade(which will not only cause the decline of all major stock markets in the developed world but will decraese also the real estate value in these countries) so my advice for the ppl is to buy Gold and Silver of which price will soar in this decade.

    ps In Australia there is a bubble in the real estate which will soon burst.

    Isfand Yar
    August 16, 2010
    Reply
  126. Does Australia still have the Highest Household Debt to Disposable Income Ratio in World since the GFC?

    Reply

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