What stopped the previous Sydney booms

The Previous Booms most similar to this current one are those in the 1880's and the 1920's

https://www.rba.gov.au/publications/rdp/1999/pdf/rdp1999-06.pdf

The Document is on the RBA Website and is Titled:

"2 Depressions and 1 Banking Collapse."

Please note that in the 1920's Private Debt to GDP was 45%

Private Debt to GDP in the 1880's was 75%

We are currently around 130%.

History repeats it self for a Reason.

 

Yeh it does Simon - but if it’s one thing I’ve learned over the past decade, don’t discount the length governments will go to in order to intervene in markets.

GFC case in point. We were heading for Great Depression 2.0 until Federal Reserve banks all over the globe made money ultra cheap through ‘QE’ essentially buying treasuries and encouraged people to speculate into assets instead of save since holding cash would return next to nothing. It reinflated asset prices of stocks and real estate and kept a floor under them. Which kept the banks from failure.

Moral of the story is don’t fight the Fed. They have more power to manipulate markets than anything you could ever imagine by printing money, stepping in and buying assets directly and pulling other demand side levers. Not fair, but life never is.

Learn Why You Shouldn't 'Fight the Fed'

 

1991 -1994 Recession 21% interest rates , 12% unemployment

2018------But... the Govt of the day being Turnbul & Co has causeda decline by stopping foreigners from buying , wheres the Chinese buyers gone now ?

What happened to immigration and refugees?

What happened to the foreign students ?

What happened to 457 visa's ?

All THESE latest things have contributed to the latest decline

 

Are you trying to say that the Global Economy has Recovered from the GFC?

They didn't "Prevent" anything.......They just "Delayed" it

Ross Garnaut:

Another GFC likely to push Australia into recession: Ross Garnaut

The Fed can't save Australia. Nor can anyone else.

 

We are all doomed! Doomed I tells ya. It's the beginning of the end!

 

Not all just those who may have borrowed too much or lose their jobs.

Every Boom ends in a Bust.

You can mock all you like.

You may not find it all that funny later on.

 

During the Great Depression Stocks bottomed in in July 1932. Businesses still function in Depressions but at a lesser degree. Some companies actually thrive in these conditions.

 

Turnbull being blaned for Chinese buyers leaving?
Seriously State government in NSW maybe.

Chinese government maybe had more to do with it or lack if value

 

No mate...I blame...you....

 

No your right too.... i think it was the NSW Govt that slapped a tax on foreign buyers?
It was either the NSW or Federal I know that ...and their both Liberal , you would think they want free enterprise.

Im bias against the NSW Govt anyway... i wont be voting for them .

 

They might be monitoring what you post.....

 

As far as timing was concerned for Australia we dodged the bullet when the GFC hit.
Billions of dollars was flowing in from the mining boom and government debt was getting smaller and smaller each year , by about 2005/2006 that debt had almost disappeared.
By 2008 the federal government and a couple of state governments were sitting on billions and billions of dollars of cash .
Hows it all looking there days regarding government debt.
Then you have household debt .
With the exception of W.A ,interest only loans were quite small in 2008 , totally different story in 2018.
I remember in 2006 everyone was flogging how easy it was to borrow large amounts of money from the banks for shares , "everyone was doing it" and it was a no brainer, what could possibly go wrong .
A couple of years later everyone suddenly realized what happened when you borrow lots of money for something that loses half its value. The debt stays the same .
In some countries property saw some big falls , but due to the tax breaks and how negative gearing works your unlikely to see big losses here.

 

It was a state tax if you are referring loading in Stamp duty for foreign investors.

God help us if Luke Fool fets in.

I still have night mares about Bob Carr. Nothing happened for 10 years

 

Luke Foley for premier...I say.....I want low prices and high rents!

 

I have been reading a lot around this and there's a few signs out there showing big correction but as @TylerJamesson has said governments will intervene and keep this all going...

 

They cant. They have Intervened already. The fact is they pulled out all the stops over the last 10 years to keep the Global Economy going but it hasn't recovered like they expected. On top of that we are back at square one again with the levels of Debt even higher than the GFC.

Interest Rates are still at Record Low levels here and in other countries. Dropping Rates from 1.5 to Zero will not have the same effect as going from 7% to 1.5%.

The Govt is already a big contributor to GDP.

Australia's economy is being cushioned by a big increase in government spending

Government spending in Australia has increased significantly in recent years, and looks likely to keep climbing.

A research note from ANZ highlights that public sector spending accounts for more 23% of Australia’s GDP.

 

By dropping the rates they keep there debt cheap to manage...

 

With 30% of Mortgage Holders not having more than a months buffer when rates are at record lows going from 1.5% to 0% will make little to No difference. Banks are exposed to offshore funding rates so even if the RBA lowered them to 0% doesn't mean the Banks will follow.

On the contrary rates are rising as Central Banks try to Normalize Monetary policy they are in even more trouble.

 

I do foresee them going up 50 points then dropping down as they finally release its killing the economy...

 

It will be too late then.