Just watch him on 7.30 report. So were heading for a depression? Who is he,has he ever done anything ? Just another professor/teacher.
Google him, plenty of entries. http://en.wikipedia.org/wiki/Steve_Keen What he said about housing prices as a ratio of average incomes has been discussed by other sources. I think it's a real issue, house prices will only go up so far - then what ? M
Not that I take any notice of them, but, some commentators seem to say that due to the shortage of housing, house prices will continue to climb, albeit slowly over the coming years. At some point though, surely it must level out. Without siginificant increases income, how can people afford to buy them. Just like all the economists were saying only about a month ago that the A$ was going to be on par with the US$ soon. No wonder we are in trouble, you've got all these guys saying things when in actual fact they have no idea. And they get paid.
i have know idea whom he is. I'm just tired of accademics giving opnions with the interviewers not checking them out.
Never heard of him before tonight, his wiki entry suggest that he has some non-standard economic views, but what he said tonight largely made sense: His theory: Consumer spending won't be stimulated enough by a rate cut, leading to trouble in the retail sector. Households with debt don't have much room to manoeuvre financially (except kids out of private school, eat like Kesla, ditch the X5) . House prices only go up if someone else is willing to pay more ( take on more debt) which people aren't doing at the moment. House prices will fall, he suggests by a large margin, perhaps 50-60 %. Then the Aussie banks will have a problem, because suddenly many loans are negative equity and probably in default. He didnt really explore the potential impact of the dramatic fall in resource prices. The notion that hasn't received much airtime is how mining companies respond to falling prices - they stop production - from one day to the next, when it's no longer economical to dig stuff out of the ground. It's not a gradual slowdown like in many other sectors of the economy. That's why there are mining ghost towns after every boom mining cycle goes bust. If that happens, the wheels will really fall off the economy, there's not a lot that goes on in Australia to generate revenue except resources and primary production (which is still in the toilet as a result of the drought). His suggestion was to be debt free, with cash and a secure job. M
Good advice, but isn't that stating the obvious. At least I can now see the benfits of studying economics for 4 years.
A: It's an interesting conundrum, falling house prices, declining levels of building, high demand for rental accommodation. Rent's won't fall unless demand decreases, and that won't happen until people start building more houses. And that won't happen until investors can see capital gains, as rent's are already unaffordable for many, so they won't go up to improve yield. My best guess is if it gets worse, the government will step in to stimulate building activity by offering huge tax incentives to build affordable housing. That will eventually sort out the supply side over a number of years, while stimulating the economy. B: Economic theory still evolving, hard to predict the future, at the time parity with USD seemed likely. M
IMO, that type of guy should be made creditable for their comments,it put a chill down my back. In fact I'm going to email him. Question. "What have you done in your life" Question." your creditentals"
I just think it is of know value to anyone to have this type of clown on national TV,sends a panic to the general public.
Maybe this might be the trigger to force the states to get rid of Stamp Duty, after all is was suppossed to go when the GST came in. edit. its a joke really, you get these first home owner grants from the federal government and it goes straight to the state.
General public don't watch the 7.30 Report, and if they did, probably wouldn't understand the concepts anyway. M
lol. so true M. BUT thats they way they want it, how else can the government manitain control over the bulk of the population. Don't educate them.
they have a bad habit on that show,of obtaining opinions from academics ,yet IMO do not check out their credentals or motives.
Conspiracy theorist ? Someone once said to me "Most people just like sport, beer and reality TV. Not interested in anything else" M
Well, it's possible. Consider US rates are now 1.5% and it remains to be seen if that stimulates the economy. And the RBA cut rates yesterday, and likley will again by then end of the year Long term, our rates have been around 2% above the US, and if theirs are close to zero ? This is worth a read: http://en.wikipedia.org/wiki/Liquidity_trap M
