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TKline

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  • Should Investors Worry About Inflation Or Rising Rates? Probably Not [View article]
    A lot of people look at the high interest rates in the 70s and 80s and think think was 'normal' and that rates should revert to those past levels. But of course that period was an anomaly and the previous century had much lower rates. This was the same in Australia as the USA as the charts below show...

    http://bit.ly/S3fQsW

    Bottom line is we're not going to see high rates like the 70s and 80s for a long time, maybe another century.
    Dec 11, 2012. 07:27 AM | Likes Like |Link to Comment
  • What Sovereign Wealth? Part 2 [View instapost]
    Governments love low to nil interest as it allows them to increase debt without the responsibility of its cost. Keep borrowing money, stimulating, without minimal care or cost to the budget interest. See below for an MMT approach to the SWF.....

    http://bit.ly/Tjxciw

    All motivated by the desire to win the next election at any cost to the future. However, in the end, this destroys the value of money and capital. It destroys motivation and innovation and ultimately everyone’s wealth, especially the rich.
    Sep 4, 2012. 06:02 PM | Likes Like |Link to Comment
  • An Australian Sovereign Wealth Fund. What Sovereign Wealth? [View instapost]
    As Australia's resources are depleted, the income from a SWF could alleviate the requirement for higher taxes to support aging baby boomers. The Oz economy is unbalanced, fixing it will hurt. If we implement a mining tax to mitigate Dutch disease or de-industrialise the broader economy, the cash should go to a sovereign wealth fund to be invested internationally and remove excess liquidity from the system. This would help the AUD stay low and rates wouldn't need to rise as much. There's a good discussion on the possibility of an Australian SWF on Australian Property Forum below.....

    http://bit.ly/TjvVbc
    Sep 4, 2012. 05:55 PM | Likes Like |Link to Comment
  • Canadian Housing Bubble Sentiment [View article]
    An excellent and enjoyable article! The parallel between the Canadian and Australian property markets is unnerving. Actually, substitute 'Canada' with 'Australia', or 'Vancouver' with 'Sydney', and the article would be just as accurate. The housing sectors in both Canada and Australia are ultimately doomed. The party's over. Here in Australia vendors are removing their overvalued houses from the market and leasing them instead, because nothing is selling, at least not for the ridiculous prices the owners expect, and auction clearance results have dropped to dangerously low levels (see http://bit.ly/I76nFx ). In fact, Brisbane had a zero percent clearance rate a few weeks back! Australian and Canada have both been running Ponzi schemes with our housing assets. This is ultimately very damaging for our future, and totally unsustainable, when each spare dollar of disposable income is wasted on overvalued homes and excessive debt, while young families battle to find affordable shelter and speculators hoard the real estate stock!
    Apr 19, 2012. 09:39 AM | Likes Like |Link to Comment
  • An Epic Australian Bust [View article]
    Great article. Australian property is in a massive bubble that's now in full-on crash mode! This has been predicted on the Zetaboards Property Forum for a long time.

    There's going to be a new Australian recession and property is doomed. All the stimulus did was kick the can down the road, and now the housing collapse will be even worse.

    It's driven along by excessive debt. To understand why unsustainable credit and debt leverage will have a hugely damaging impact to the real estate in the years ahead, read up on the excellent work by Professor Steve Keen here:

    http://bit.ly/xGopGh

    Steve is the Aussie economist who predicted the GFC and Aussie housing collapse in case you didn't know, and he has also proven that unsustainable credit/GDP ratios will always result in death for the property sector.

    Excess leverage is what made the property bubbles so devastating for the UK, Japan, America and Ireland.

    So if you want to blame anything for the coming property crash, blame the ramping up of debt (which incidentally hasn't stopped, the debt is still there, and it's being transferred from the consumer to the government).

    No good will come of this, Australia is staring down the barrel of a multi-year recession and massive property crash, if we're lucky.

    Tom Kline.
    Feb 28, 2012. 05:36 AM | 1 Like Like |Link to Comment
  • 4 Tech Stocks We'd Avoid, 1 To Buy Now [View article]
    I think a problem with any asset or investment class these days is the amount of debt and leverage involved in all markets. Even if you're not highly leveraged yourself, you can bet most of the other market participants will be, and that makes for an unstable investment (through no fault of your own) when the global economy has another dip and all asset classes get the jitters.

    Excessive leverage is partly what made the bubble aftermath so devastating for Japan, America and Ireland. When sonsidering which shares are a good buy, think about China and it's potential impact on the global economy and house prices.

    Several months ago, so-called Chinese 'expert' Nick Lardy dismissed worries about what he called the "so-called property bubble" - this was during a conference held at Peterson Institute in DC. However, he now concedes that says a real estate downturn may cause a significant in China, and this is an opinion shared by many other mainstream economic analysts, see third news headline below.....

    http://bit.ly/sRgp5r

    So what changed his opinion? I would suggest a dawning realisation that most of the massive Chinese stimulus, lending and spending during 2009/10 just ended up in property purchases, which drove real estate prices in an alarming and totally unsustainable manner. Also, a realisation from the bears on the Zetaboards Property Forum that China's economic system frequently produces bubbles, and that's not very likely to change in the near future.

    It means asset markets and share markets are probably doomed!
    Oct 26, 2011. 08:41 AM | Likes Like |Link to Comment
  • Today's U.S. Market Isn't Japan All Over Again. Prepare For The Next Leg Up [View article]
    Great article. The unbridled greed of the few has resulted in great damage to global economies and society.

    They say no good deed goes unpunished, and the reverse seems to have happened here. Their bad deeds have been rewarded with bailouts, blame shifting and bonuses.

    It makes me sick.

    I wonder about the psychology of bulls and investors in this environment. Do they really think this is a new paradigm where bubbles never burst. Reading the spruikers comments below, you'd have to say so.....

    http://bit.ly/tDHtkY

    If these people are still living in such a world of delusion, what hope is there for society. Can the 'Occupy' protests ever change the minds of people who are that sure the bubble is a myth?

    Let's hope we can change their outlook. For if we can't, the global economy is doomed.
    Oct 26, 2011. 08:39 AM | Likes Like |Link to Comment
  • Is Now The Time To Short Housing? [View article]
    I admire your stance, but a major problem today is that the property media and the blogosphere are dominated by the 1 percent who control the real estate message.

    The 1 percent control everything, and they control the news that they drip fed to the masses, to the 99 percent.

    It was revealed recently that the Australian real estate industry actually pays shills and spruikers to 'talk up' property on forums and blogs (yes even blogs like this one) to plant positive spin, to post as if they are one of the 99 percent when in fact they are the 1% pretending to be a normal blogger.

    Watch this for evidence, it includes a video that Bernard Salt probably wishes was never recorded:

    http://bit.ly/ubR6EP

    Are your eyes open yet people? Don't believe what you read, anywhere. The problem is the 99 percent don't read blogs like this. They don't find out the truth. So pass this on, pass the message on to everyone. Tell your friends what's happening. Make them read Joe's article. Make then watch the Bernard Salt video (he's a public figure, they might have heard of him, they might listen to his scheme and revolt against it).

    Above all, remember, the 99 percent are fed lies by the 1 percent and this is a huge obstacle we must overcome.

    But in time, the truth must come out. It always does.

    We are the 99 percent.
    Oct 26, 2011. 08:37 AM | Likes Like |Link to Comment
  • Nestle buys majority stake in Chinese candy maker [View article]
    My worst fear as an investor right now would be China. A drop in Chinese asset values would not only shake confidence in China's economic vitality, but it would also open debate about whether or not the global economy is over-leveraged and over-reliant on the success of China (it is).

    Excessive leverage is partly what made the aftermath of the real estate bubbles (australianpropertyforu...) so devastating for Japan, America and Ireland. Several months ago, so-called Chinese 'expert' Nick Lardy dismissed worries about what he called the "so-called property bubble" - this was during a conference held at Peterson Institute in DC. However, he now concedes that says a real estate downturn may cause a significant in China, and this is an opinion shared by many other mainstream economic analysts.

    So what changed his opinion? I would suggest a dawning realization that most of the massive Chinese stimulus, lending and spending during 2009/10 just ended up in property purchases, which drove real estate prices in an alarming and totally unsustainable manner. Also, a realization that China's economic system frequently produces bubbles, and that's not very likely to change in the near future!

    To understand why excessive debt and leverage is going to have a hugely negative impact on all asset classes going forward, read up on some of the work by Professor Steve Keen (australianpropertyforu...). He's the Australian guy who predicted the GFC, and he has also shown that unsustainable debt to GDP ratios in a country (which you definitely have in the UK, and we have in Australia too) will always result in deflation or depression.

    Tom Kline
    Oz Population Ponzi Blog
    australianpropertyforu...
    Jul 11, 2011. 10:31 AM | Likes Like |Link to Comment
  • Nestle buys majority stake in Chinese candy maker [View article]
    My biggest fear as an investor right now would be China. A drop in Chinese asset values would not only shake confidence in China's economic vitality, but it would also open debate about whether or not the global economy is over-leveraged and over-reliant on the success of China (it is).

    Excessive leverage is partly what made the aftermath of the real estate bubbles so devastating for Japan, America and Ireland. Several months ago, so-called Chinese 'expert' Nick Lardy dismissed worries about what he called the "so-called property bubble" - this was during a conference held at Peterson Institute in DC. However, he now concedes that says a real estate downturn may cause a significant in China, and this is an opinion shared by many other mainstream economic analysts.......

    So what changed his opinion? I would suggest a dawning realization that most of the massive Chinese stimulus, lending and spending during 2009/10 just ended up in property purchases, which drove real estate prices in an alarming and totally unsustainable manner. Also, a realization that China's economic system frequently produces bubbles, and that's not very likely to change in the near future!!

    To understand why excessive debt and leverage is going to have a hugely negative impact on all asset classes going forward, read up on some of the work by Professor Steve Keen. He's the Australian guy who predicted the GFC, and he has also shown that unsustainable debt to GDP ratios in a country (which you definitely have in the UK, and we have in Australia too) will always result in deflation or depression.

    Tom Kline
    Oz Population Ponzi Blog
    Jul 11, 2011. 10:29 AM | Likes Like |Link to Comment
  • World markets down after bleak Fed chief comments [View article]
    This economic collapse is happening at a rapid rate. Most citizens live in a economic situation they neither comprehend nor gain from. The reality is speculators sowed the seeds of their own downfall by bidding up stock values using unsustainable leverage and easy credit - a way of life that become entrenched in culture until every idiot out there was certain asset prices can't drop back to past levels. Check out the nonsense comments from spruikers on forums like australianpropertyforu... to see how entrenched is this myth that "markets must always rise". No one gains from asset price inflation because bubbles always pop. Today's underclass will have the last laugh when asset values do drop up to 50%, which is happening already in many places around the world.

    Tom Kline
    Steve Keen Fan Club
    australianpropertyforu...
    Jun 8, 2011. 09:47 AM | Likes Like |Link to Comment
  • Australia's Awesome 5 Banks [View article]
    The Oz house price crash is in progress as we speak and prices are declining rapidly. The majority of Aussies exist in an economic environment they can neither understand fully nor benefit from in any way. The facts here are that Aussie housing market speculators brought this all upon themselves by bidding up the value of low quality housing via sky-high debt levels and (non optional) dual incomes, and this way of life has become so engrained in Australian culture now that almost every sucker out there is convinced prices can't ever go back to where they were in the past, when an average single income could easily afford to buy an average house. Just have a look at some of the inane comments and assertions from the real estate spruiker crowd on forums like Somersoft australianpropertyforu... to realise just how deeply engrained this "house prices always go up" myth has become.

    Us Aussies have a dreadful track record in the real estate market. Most Europeans countries have better housing models that work fairly and equally for all, and should be the envy of Australian politicians (yet even still, the Europeans are having to foot the bill for the bank bailouts I suppose). Anyhow, the moral is few people ever really win from these skyrocketing home prices, but we can take hear that these ridiculous home prices are NOT here to stay, regardless of what the property spruiker fraternity will try to tell you! There are so many FHBs locked out of the real estate market now that something had to give, and now prices are finally falling (which was inevitable). Today's renters and prospective FHBs will get the last laugh when home values finally do plummet by up to 40%, which is what is happening right now in many cities and towns across Australia.

    There is huge pressure placed on house prices and rents. There's no doubt the Australian property bubble has inflated to a large degree because of loose credit. It's been reported extensively by APM australianpropertyforu... (Australian Property Monitors) and several other organisations.

    Tom.
    May 16, 2011. 10:10 AM | 1 Like Like |Link to Comment
  • With Canadian property in "bubble territory," analysts at BoA explain why the downside poses little risk to the financial system. Among the reasons are government mortgage guarantees, lower leverage, and full-recourse mortgages - it all sounds nice until prices actually decline, says Tracy Alloway.  [View news story]
    12 months ago there was complete denial that Canadian real estate was in trouble, but now the realization is beginning to dawn on many that something terribly serious is about to occur in Canada and Australia. Australian housing is vastly, dramatically overpriced, by all reasonable measures. The recent analysis by The Economist is right on the money, and anyone will see from the excellent blogs on AustralianPropertyForu... just how overvalued Australian housing really is:
    australianpropertyforu.../
    The bigger the boom, the bigger the bust, and the property boom that began in Australia in the nineties evolved into the greatest real estate bubble known to mankind. The bust that's coming will be a doozy. As 2011 unfolds the spruikers will come to understand that real estate in Australia is dead for generations. During the next two years we can expect to see vacancy rates and inventory levels surge to unprecedented levels as house prices collapse by up to 40 or 50% in most parts of Australia. This might sound extreme, over the top. But how over the top were the 200% to 300% rises in house prices we saw over the past decades. A 50% fall is nothing in the scheme of things, it just brings prices back to a fair level. The bubble is dead. Long live the new new paradigm, where an average family can finally afford a decent home in Australia. It's been a long time coming, but soon it will be time for the bears to party. Bring it on!
    Tom Kline
    australianpropertyforu...
    Australian PropertyForum.com
    Mar 24, 2011. 11:39 PM | Likes Like |Link to Comment
  • Not the first time the story has been told, this news show from Australia about China's empty cities and shopping malls visits some new spots. "It's the modern equivalent of building pyramids, it doesn't really add to the betterment of lives, but it adds to the growth of GDP."  [View news story]
    Yes, Australia's property bubble depends on China, and China is experiencing a real estate bubble bigger than any in the world, apart from Australia! By all measures (price/rent, price/income, dwellings/population) Australia's bubble is on a larger scale and even less sustainable that the China bubble! Like Australia, China is investing in pointless excessive infrastructure that nobody needs, including the huge oversupply of houses in Australia as demonstrated on AustralianPropertyForu... China is responsible for most recent global demand for commodities so when their bubble pops, Australia is doomed! China's collapse will seriously affect Australia and other countries benefitting from China demand. Coal and iron prices will plummet along with oil and other commodities. China's dramatic growth won't go on forever. Most people must realise by now Australia has an unsure future. Nobody knows exactly when the collapse will happen but there's no doubt it will happen sometime and the longer this bubble expands the worse the crash will be. China saved Australia during the GFC but when they fall over the effect on Australia will be devastating. History teaches us that diminishing resources and increasing demand always leads to disaster. China needs our resources and they might do whatever they can to secure them, even if it means war.

    Tom Kline
    australianpropertyforu...
    Australian Property, Economy and Politics Forum
    Mar 24, 2011. 11:34 PM | Likes Like |Link to Comment
  • National Debt = Great Recession 2.0 [View article]
    Recent growth in median asset prices was outstripping median incomes for years, meaning the corresponding household and national debt levels were unsustainable. It seems impossible for debt levels to rise more quickly than incomes forever, because the logical conclusion is that so much money would be spent servicing the debt there will be no money left for any other purpose. I believe many countries in the world are rushing headlong into peak debt, driven by excessive borrowing and a dangerous addiction to credit. (This is from an excellent blog on Peak Debt, here...

    s4.zetaboards.com/Aust...

    Cheers,

    Tom Kline
    Jan 23, 2011. 05:12 PM | 2 Likes Like |Link to Comment
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