“Here is another article that confirms the increasing debt burden of excessively priced housing.

http://business.smh.com.au/business/debt-burden-spoils-retirement-party-20090831-f5df.html………………………………...

I have long maintained that while interest rates are relatively low, that housing prices would rise, especially if so-called experts starting talking about the financial crisis being over. These grabs to ‘ordinary man or woman on the street’ who are in the market for an owner-occupied property has triggered an unprecedented splurge on property in recent weeks.

I take a great interest in the inner to mid northern suburbs of Melbourne, and if you think prices were outrageous last year, then prepare for what is to come. There was a window for the first couple of months of this year- where prices had actually started to genuinely come back, there was lots of talk in the media about concerns of the greater economy- Steve’s points were even starting to stick! Unfortunately interest rates held firm low then, and so we now have this extraordinary situation where people are paying even more than 2007/2008- and therefore taking on even more debt.

My research on property in Melbourne North’s at it’s most updated- ie: yesterday!: an unrenovated cream BV on a small block two doors down from fibro commission flats sold for $609,000- undoubtedly it would’ve made no more than $420k last year at the property market’s peak. Another unrenovated ‘beauty’ red brick in North Coburg- not Coburg, not Thornbury, not NOrthcote- but North Coburg, almost at the cemetery sold for $561k, undoubtedly would’ve struggled to reach $400k at the peak last year.

One contemplates what sort of loan approval analysis are banks going through- the charade they play over approvals including what valuation they place on the property are farcical. The amount of debt if current activity continues into summer, is going to be monstrous. If government policy continues in the same vein as I have alluded to from debtjunkies post above, there’s going to be a lot of hands grabbing for the government handout pot, especially when interest rates go up, or can Wayne Swan wangle his mates at the RBA to leave them alone til next year- if he does Armageddon may arrive sooner than the ordinary man expects, even worse the ordinary man probably isn’t even aware of it’s coming- he too busy servicing his debt under the illusion he’s paying off the principle.

AUD/USD has gone up to 0.85 from the February low of 0.65. That means the Australians are buying more from the US with the same amount of AUD. I wonder this currency crisis will someday permeate thru to other debtor nations like Australia.

Dr Keen believes that the impact by private debts contractions could hamper the authorities remedies. I think Dr Keen’s model has not taken into account the proportion of risk-free private debts. E.g., some of the housing loans borrowed by overseas students are guaranteed by their wealthy parents who would bring in millions in cash once their son or daughter gained a foothold in Australia.

What role is this inflow of private cash funds playing in the larger economy?

Your view on financial markets does not exist? Bit difficult?

You are the guru!

I have put out what i know will happen, but i still have no idea what the hell you think is happening or what will happen?

I gave you the bottom in gold and you mocked me, then when it bottomed in July and is on a tear now you still mock me.

Who on this website has made a ballsy call like the one i made on gold and the other call of 1224 by November 5, who has actually said anything constructive of this website that HAS ACTUALLY HAPPENED, NOT WILL HAPPEN IN 5 YEARS?

You actually have the hide to mock me.

You think by trading natural gas futures or stocks will get you out of trouble?You are truly delusional and have no idea whatsoever is about to transpire in the world.

WAKE UP BTB

Iceland has had a currency event, agreed. But that has not triggered global hyper-inflation.

Please explain to me how there can be a currency induced hyper-inflation everywhere? Currencies are relative. If one currency were to crash, it is in relation to others.

How can speculators crash all the world’s currencies simultaneously. Or are you just suggesting a hyper-inflation in the US. ($US value of gold would rise, but $A value may stagnate or fall) or a hyper-inflation in Australia where the $US value of gold may rise or fall, but the $A value of gold would skyrocket?

I think I have asked this question of you 4 times now. You don’t have to answer me. Please ask the question of yourself.