We should have more thoughts. But to tell you the truth, many of our thoughts went out of our head on our recent round-the-world trip. You need constant air pressure in order to maintain thoughts. And regular hours. Start getting up at midnight and going to bed at noon; thoughts have a way of disappearing by late afternoon. If they were ever there in the first place.
One thought that disappeared somewhere over the pacific was this:
The suntanned country must be close to getting burnt.
Australia is booming. Prices are high. It cost $38 for breakfast in the Crown Towers hotel. Even so, you could have only one cup of café latte. You’d have to pay extra for another one.
Our total bill for 3 nights was over $2,000. Impossible? Well, we thought so too. But when you throw in a bit of laundry…transfer from the airport…and breakfast for a friend, not to mention a consumption tax of $184, you end up over 2,000 bucks – without even a single dirty movie.
The boom has been going on Down Under for the last 19 years. Not even the Great Correction is stopping it. Each year, it sells more dirt to Asia… from 40% of its exports 10 years ago to 72% today. It should probably just sell all of Western Australia to the Asians and be done with it.
Meanwhile, the Ozzies enjoy their boom…raise their glasses…and throw raw meat on the barbie. Our colleague’s house in Melbourne has risen 200% in price since we sent her there four years ago. And it’s still going up. Converted shipping containers, transformed into mobile homes, sell for as much as $1 million. And truck drivers in the mining areas earn more than $100,000 a year.
How long can this go on? We don’t know. But our advice to our colleague was simple enough:
*** From The Daily Bell:
The problem with where America is now is that the country has been built on one lie after another for the past decade and the lies show no signs of slowing down.
*** And here’s the Bloomberg report on the tax deal. As you will see, Congress will do “whatever it takes” to continue spending money it doesn’t have, including ignoring a law it passed last February:
Congressional Democrats and Republicans are preparing to set aside their budget constraints as they negotiate the extension of income tax cuts scheduled to expire this month
Their plans to declare a budget emergency as they approve the extension of tax cuts will override a “pay-as-you-go” law that was structured to limit Congress’s ability to finance higher spending or tax relief by expanding the budget deficit.
Extending all income-tax rates for two years, along with renewal of business tax breaks, relief from the alternative minimum tax and other moves such as expanded unemployment insurance could add about $750 billion to the deficit over the next decade, about $300 billion of which is beyond the deficit-expansion which the “pay-as-you-go” law would allow.
For all the campaign-trail rhetoric about deficit reduction and recent attention focused on a bipartisan fiscal commission, Republicans and Democrats alike say the so-called “paygo” law won’t be a procedural or political obstacle to extending all of the tax cuts without offsets in spending.
The paygo law, signed by President Barack Obama on Feb. 12, generally requires that tax cuts or increases in mandatory spending be offset by spending reductions or revenue-raising measures. The law allows Congress to exempt about $1.5 trillion if needed to extend many of the Bush-era tax cuts.
“That paygo law is just used to increase taxes,” said Senator Orrin Hatch of Utah, who is in line to become the top Republican on the Finance Committee next year. “It doesn’t make a hill of beans what the difference is as far as cutting back on spending and the overregulation that these Democrats have brought to this country.”
for The Daily Reckoning Australia