Warnings of financial 'catastrophe'

T'was on the news tonight...

Warnings of financial 'catastrophe' as debt helpline buckles under weight of calls

 

I don't know if there will be financial catastrophe but record levels of personal household debt are concerning.

 

Yeah I agree Perthguy, it is concerning, I saw the same before I left the UK in 2007. Everyone knows what happened in 2008. Plus I also worry when I see all the adverts on tv for easy loans and credit help. Not good.

 

Heaps of ads for pay day lenders and heaps for money management. It's concerning.

 

But to positive iron prices are rising resulting in rising shares for Rio and BHP. Plus it's good to see more positive focussed property renovation and development shows on TV.

It's a bit of a mixed bag ATM.

 

It is the financial catastrophes they don't predict that I worry about because those predictions do come true.

 

I said it before. You would hope that the 3 signicant changes to debt servicing will help avoid disaster ( servicing rates of 7%, minimum expenses, shaving of rental income ). I left the 3rd one in because rentvesting has become so popular even though mortgage defaults would be most likely among owner occupiers.

More work needs to be done by regulators to reduce the additional problems caused by credit cards. Improved methods of credit scoring help.

Bank price gouging on credit card interest rates really needs to be dealt with. Significantly improved regulation of interest free retail is also needed.

 

The solution is simple.

People have to learn to live within their means. Expenditure cannot consistently exceed income without it ending in tears.

Then again, I was brought up in the 1950s. If you couldn't afford it, you didn't buy it. Sadly, I guess saving up for something is an antiquated idea for many.
Marg

 

I get people buying $30 items from my business on interest free finance. I sit there wondering how far down on the bone of your *** you would have to be doing that.

 

Agree with @Marg4000 buy only when you and can afford it. I needed t shirts and I bought 4 tees for $5 each and was so happy. I still look presentable. Been thinking about getting a new car but since I'll only pay cash for it, i feel the hurt...so no new car or new second hand car...

Then last night I heard that a friend bought a brand new Porsche but I'm sure he paid it cash in full.

 

Unfortunately we have personal debt trending strongly upward with wage growth and underemployment trending strongly in the opposite direction. There are many factors driving this, but my personal view is the transition of our economy to service industry is certainly helping to drive the trend.

From a personal perspective I worked for many years in in the manufacturing industry. I enjoyed stable fulltime employment, was well paid (over paid to the ire and opinion of many) and had access to overtime with fair penalty rates.

I now have transitioned to a service industry with little to no job security and lower wages. Fortunately during this transition I was responsibly living within my means and have not gone down the credit path spiral. Where I have adjusted is a large reduction in my consumer spending. While this is the responsible thing to do personally, it does little to benefit our economy. Multiply this out to the now thousands "transitioning" in the economy who are unwilling to take a cut in there actual or perceived standard of living and they will turn to credit!

 

I was brought up in the 80's and I learned the same thing.

 

ahh! The 80s what a time! Video stores and vhs tapes, fish n chip shops with pinball machines, chicks with big hair, guys with perms, endless supply of cheap datsun 120ys in the local trader, basking in the glory of the Americas cup victory!

followed by the reality check of 1990 and the recession we had to have.

 

Indeed. How do you think I learned not to live beyond my means?

 

Weren't we just six weeks away from a financial melt down a few months ago or was it longer , or maybe that was just another prediction I remember .

The Great Depression of 1999 was an interesting read , leading into the early 2000's boom .

Cliff

 

But then again I think we are all going to hell, Trump got in

 

Amazing how many Australian people's lives are funded purely by debt, and US$ debt too.

 

Always 6 weeks from disaster, those guys have to be right sometime, so they will keep coughing it up......

 

Australian Household Debt, an issue if house prices fall

 

yup household debt levels are at really high levels,

http://www.couriermail.com.au/news/...t/news-story/a04c3fefdf4399efb1168c1c92fd14d6

it is likely it will only decrease if we have a recession or some rise in interest rates. The painful deleveraging will occur at some point, but with central banks artificially delaying this, it could be some time yet before this happens. Just look at the Euro region, which has been going sideways despite massive ongoing stimulus. We could very possibly end up with stagflation at some point.


The other big one is the gov and foreign debt to GDP ratio which has only been grinding up with our massive budget deficit/hole which Canberra seems to be hoping some lucky break will help to plug it up.