Re: Aussie dollar on the turn
 

Seriously, all this talk of the mining boom propping up Australia's economy is rubbish. What % of jobs are actually affected by mining money? A tiny amount I'll bet. Sure it's great if you want to move to the middle of nowhere in WA and earn $500k to drive a truck, but as far as the whole Australian economy is concerned it's actually peanuts.

Things are looking pretty bleak for Australia now economically. Things have turned much faster there than I anticipated and it looks like yet again Australia is going to suffer a much worse fate than both the UK ad the USA - even with this wondrous mining boom.:rolleyes:

Re: Aussie dollar on the turn
 

Agreed the housing will bounce back it always does and i do know there are a fair few apartment blocks going up in perth but unfortuanately i dare say a few are unionised so for the joe blow in the street often these jobs are out of reach unless they are in the know .
So really the construction jobs in the city and the mining jobs in the bush are all tied up for the lucky few due to either union monopolisation or employers who dont want to train up an australian work force .
I dont know wether the apartment blocks in perth will suffer like the apartment blocks in the uk where they have devalued by up to 60% ,i suppose only time will tell .
I dont know how long you have lived in aussie amazulu but i lived through the last recession here and it was far far worse than what was chucked at the unfortunate british workforce ,as i read somewhere australian recessions and slow downs are brutal and no part of the economy will escape .Lets hope in six months this hole that is developing will be filled in again .

Re: Aussie dollar on the turn
 

NO it wont "prop up" the Aussie economy...but it sure will help! Its not the number of jobs in the industry that has the effect but the value of goods sold, particularly for export, that brings "new" money into the country. It may only take a few thousand people to dig it out but the earnings for the sector are billions!

Re: Aussie dollar on the turn
 

The building industry should be viewed as a unique case, as it is really a "service" industry, and responds directly (& quickly!) to internal pressures.

In times of "boom" land availability becomes scarcer, and prices rocket, so the majors buy up land allocations that they may not develop for 1 or 2 years, in the certain knowledge that it is only going to cost more later!:rofl: Unfortunately this means that when a "recession" hits & house prices drop...even only a little, they are left holding development land that is un-economic to build on as they paid too much for it compared to what they can sell the housing for in the current market. This means they have to "downsize" and "tread water" untill such times it becomes economic to develop their land holdings again.

Perhaps a simplistic description of the situation, but basically what happens!

Re: Aussie dollar on the turn
 

I can see where you're coming from, but I think you're looking at the whole country as if it's a bigger WA. The fact is that a country doesn't live off a single industry - however healthy that is - and Australia generally is in trouble economically.

Dividing the "wealth" (whatever *that* is) of the continent by the population makes Australia one of the richest countries in the world. But there is widespread poverty, especially outside the major cities, and millions who are only just keeping their heads above water - and the water level is rising fast.

Yes, we can keep on digging up WA and flogging it to the Chinese, until the Indian Ocean is lapping against the divide. And this "wealth" will to some extent filter across into Joe Public's wallet. But there ain't much more in the bowl, in my opinion. The general apathy to making things better, to competing in any meaningful sense relegates Australia to a backwater economy in world terms, except at present for the mining industry.

Re: Aussie dollar on the turn
 

Despite being a property owner I just don't get the logic of crowing over increasing house values, or wailing when they fall.

Housing is like food, water and heating: it's a basic human necessity.

You'd be locked away for gloating about rising food prices. And food is, like energy, now feeling the huge inflationary pressure at last of the demands of an increasing population worldwide.

How would someone be looked upon, who stacked away tons of tinned food in the expectation of making a killing? Yet that's exactly the equivalent of praising housing inflation: it's just that we've been brainwashed into thinking higher prices are GOOOOD! (But only in housing).

Re: Aussie dollar on the turn
 

There are different ways to look at this. Sure, resources only affect a small amount of people directly, but they also influence the whole economy. Here's how:
Canberra and the states get royalties from resources.
More resources, more royalties.
These royalties can be used to cut taxes or be used for porkbarrel projects, ie infrastructure to stimulate/prop-up the economy.
Gov has huge surplus due to resources. This surplus enables my previous point.
Resource tonnage/barrels/cubic metres are increasing dramatically this year - after many years of flat growth - and will continue to increase in the next 5-10 years, providing even more royalties.
Etc.

That the government/states should be diversifying the economy is a given. Unfortunately, most governments are pretty short-sighted in this regard.

Define poverty? All countries - with the exception of a few European ones - have poverty. Always have had, always will. Welfare helps to cushion it somewhat. Only wealthy countries - like Australia - can provide decent welfare. In Australia, resources provide a lot of this wealth.

Australia may not be the most dynamic/resourceful/inventive countries in the world, but it is one of the wealthiest and is hardly a 'backwater economy'.

Re: Aussie dollar on the turn
 

Absolutely. Blame the govt which has encouraged escalating house values through its tax system.

Re: Aussie dollar on the turn
 

Ignoring your owm personal circumstances - does this not concern you? i.e. that its wealth comes from simply digging up the ground?

Re: Aussie dollar on the turn
 

Not at all. The things we have/need/want must be made out of something. The fuel we put in our cars or use to heat our homes has to come from somewhere. Australia is in the fortunate position of having a lot of the stuff in it's ground that society needs to function - and is prepared to pay for. Most of Australia's wealth comes from out of the ground/sea and without it we would be f**ked.

It would be criminal not to exploit our resources.

Re: Aussie dollar on the turn
 

>>Most of Australia's wealth comes from out of the ground/sea and without it we would be f**ked. <<

I rest my case, m'lud <g>.

Re: Aussie dollar on the turn
 

But we do have it. Fact.
It's there, is being exploited and is making Australia one of the wealthiest countries in the world. Cha-ching.

I rest my case.

Re: Aussie dollar on the turn
 

Until the Chinese find a cheaper source such as in Africa.

A one trick pony does not look so clever when another can do the same trick.

G

Re: Aussie dollar on the turn
 

They are getting what they need from there already - as well as S. America, Asia and Australia. Commodities tend to cost the same wherever they come from given extra transport costs, 'instability' premium' etc, or prices are determined by the market.

Re: Aussie dollar on the turn
 

News out today in the UK (pushed to the end of the business slot on BBC) is that Nationwide report another 1.7% drop in house prices in July. This is big. It pushes the house prices down to 8.1% this year, which annualised is nearly 14%. Which is pretty much a bona fide housing crash. The Govt. and BBC can try and suppress this as much as they like, but they can't run from economics, and neither can the Australians.

The fact is many Western economies have been run into the ground by greed and now it's coming back to bite us in the arse. I fully expect from peak to trough at least 30% off British and Australian house prices - and even then they will be expensive by any objective measure when compared to average wages.

For example - I know of a flat for sale, which was over £200,000, and is now going for £150,000. Quite a drop you might say, and I would agree. The problem is in any sane market this property is not worth any more than £80,000. And even then it's still over three times the average salary!

Prices have a long way to fall.