Prosper Australia – First Home Buyers Strike!

13 04 2011

David Collyer of Prosper Australia

Who are you listening to?  The Government and Real Estate agents?

You’re not going to find gold and silver beneath the surface of the ground, you need to dig deep.  Well,  just like searching for the “pearl of great price”, we need to dig deeper and search for answers ourselves.

Can the words of David Collyer and Prosper Australia be true?

I guess we will all know sooner or later, here in Australia – but is it going to be a costly lesson?

Don’t be a follower.. dig for yourself!


Home loans fall to levels not seen in 10 years

11 04 2011

The avalanche of bad residential property news just keeps coming. Today, the ABS reported home loan approvals in February has fallen a seasonally adjusted 5.6 percent to 45,393 approvals. This is the lowest number in the past 10 years, when in February 2001, 44,663 approvals were recorded. February’s figure is now 32% lower than the peak 66,767 approvals recorded in July 2007 before the Global Financial Crisis took hold.

Tasmania lead the plunge, recording a 13.7% fall in approvals. Home loans in the Northern Territory fell 11.4, New South Wales 10.1 percent, South Australia 5 percent, Victoria 4.6 percent, ACT 4.5 percent, Western Australia 2.1 percent, while flood ravaged Queensland only recorded a 0.5 percent fall.

» Home loans drop on weak demand in biggest fall in 14 years – News Limited, 6th April 2011.
» Home loans sink to decade low – The Sydney Morning Herald, 6th April 2011.

People of the Earth – Prepare for Economic Disaster

6 04 2011

It is not just the United States that is headed for an economic collapse.  The truth is that the entire world is heading for a massive economic meltdown and the people of earth need to be warned about the coming economic disaster that is going to sweep the globe.  The current world financial system is based on debt, and there are alarming signs that the gigantic global debt bubble is getting ready to burst.  In addition, global prices for the key resources that the major economies of the planet depend on are rising very rapidly.  Despite all of our advanced technology, the truth is that human civilization simply cannot function without oil and food.  But now the price of oil and the price of food are both increasing dramatically.

So how is the current global economy supposed to keep functioning properly if it soon costs much more to ship products between continents?  How are the billions of people that are just barely surviving today supposed to feed themselves if the price of food goes up another 30 or 40 percent?  For decades, most of the major economies around the globe have been able to take for granted that massive amounts of cheap oil and massive amounts of cheap food will always be there.  So what happens when that paradigm changes?

At last check, the price of U.S. crude was over 104 dollars a barrel and the price of Brent crude was over 115 dollars a barrel.  Many analysts fear that if the crisis in Libya escalates or if the chaos in the Middle East spreads that we could see the all-time record of 147 dollars a barrel broken by the end of the year.  That would be absolutely disastrous for the global economy.

But it isn’t just the chaos in the Middle East that is driving oil prices.  The truth is that oil prices have been moving upwards for months.  The recent revolutions in the Middle East have only accelerated the trend.

Let’s just hope that the “day of rage” being called for in Saudi Arabia later this month does not turn into a full-blown revolution like we have seen in other Middle Eastern countries.  The Saudis keep a pretty tight grip on their people, but at this point anything is possible.  A true revolution in Saudi Arabia would send oil prices into unprecedented territory very quickly.

But even without all of the trouble in the Middle East the world was already heading for an oil crunch.  The global demand for oil is rising at a very vigorous pace.  For example, last year Chinese demand for oil increased by almost 1 million barrels per day.  That is absolutely staggering.  The Chinese are now buying more new cars every year than Americans are, and so Chinese demand for oil is only going to continue to increase.

Much could be done to increase the global supply of oil, but so far our politicians and the major oil company executives are sitting on their hands.  They seem to like the increasing oil prices.

So for now it looks like oil prices will continue to rise and this is going to result in much higher prices at the gas pump.

Already, ABC News is reporting that regular unleaded gasoline is going for $5.29 a gallon at one gas station in Orlando, Florida.

The U.S. economy in particular is vulnerable to rising oil prices because our entire economic system is designed around cheap gasoline.  If the price of gas goes up to 5 or 6 dollars a gallon and it stays there it is going to have a catastrophic effect on the U.S. economy.

Just remember what happened back in 2008.  The price of oil hit an all-time high of $147 a barrel and then a few months later the entire financial system had a major meltdown.

Well, as the price of oil rises it is going to create a whole lot of imbalances in the global financial system once again.

This is definitely a situation that we should all be watching.

But it is not just the price of oil that could cause a global economic disaster.

The global price of food could potentially be even more concerning.  As you read this, there are about 3 billion people around the globe that live on the equivalent of 2 dollars a day or less.  Those people cannot afford for food prices to go up much.

But global food prices are rising.  According to the United Nations, the global price of food has risen for 8 consecutive months.  Last month, the global price of food set a brand new all-time record high.  Many are starting to fear that we could actually be in the early stages of a major global food crisis.

The price of just about every major agricultural commodity has been absolutely soaring during the past year….

*The price of corn has doubled over the last six months.

*The price of wheat has more than doubled over the past year.

*The price of soybeans is up about 50% since last June.

*The price of cotton has more than doubled over the past year.

*The commodity price of orange juice has doubled since 2009.

*The price of sugar is the highest it has been in 30 years.

Unfortunately, the production of food in most countries around the world is very highly dependent on oil, so as oil goes up in price this is going to make the food crisis even worse.

Hold on to your hats folks.

Also, as I have written about previously, the world is facing some very serious problems when it comes to water.  Due to the greed of the global elite, there is not nearly enough fresh water to go around.  The following are some very disturbing facts about the global water situation….

*Worldwide demand for fresh water tripled during the last century, and is now doubling every 21 years.

*According to USAID, one-third of all humans will face severe or chronic water shortages by the year 2025.

*Of the 60 million people added to the world’s cities every year, the vast majority of them live in impoverished slums and shanty-towns with no sanitation facilities whatsoever.

*It is estimated that 75 percent of India’s surface water is now contaminated by human and agricultural waste.

*Not only that, but according to a UN study on sanitation, far more people in India have access to a mobile phone than to a toilet.

*In northern China, the water table is dropping one meter per year due to overpumping.

These days, one of the trendy things to do is to call water “the oil of the 21st century”, but unfortunately that is not a completely inaccurate statement.  Fresh, clean water is something that we all need, but right now world supplies are getting tight.

Our politicians and the global elite could be doing something about this if they really wanted to, but right now they seem perfectly fine with what is happening.

On top of everything else, the sovereign debt crisis is worse than it has ever been before.

All of the major global central banks have been feverishly printing money in an attempt to “paper over” this crisis, but it is not going to work.

Most Americans don’t realize it, but right now the continent of Europe is a financial basket case.  Greece and Ireland would have imploded already if they had not been bailed out, and now Portugal is on the verge of collapse.  The interest rate on Portugal’s 10-year notes has now been above 7% for about 3 weeks, and most analysts believe that it is only a matter of time before they are forced to accept a bailout.

Sadly, if the entire global economy experiences a slowdown because of rising oil prices, we could see half a dozen European nations default on their debts if they are not bailed out.

For now the Germans seem fine with bailing out the weak sisters that are all around them, but that isn’t going to last forever.

A day or reckoning is coming for Europe, and when it arrives the reverberations are going to be felt all across the face of the earth.  The euro is on very shaky ground already, and whether or not it can survive the coming crisis is an open question.

Of course there are some very serious concerns about Asia as well.  The national debt of Japan is now well over 200% of GDP and nobody seems to have a solution for their problems.  Up to this point, Japan has been able to borrow massive amounts of money at extremely low interest rates from their own people, but that isn’t going to last forever either.

As I have written about so many times before, the biggest debt problem of all is the United States.  Barack Obama is projecting that the federal budget deficit for this fiscal year will be a new all-time record 1.65 trillion dollars.  It is expected that the total U.S. national debt will surpass the 15 trillion dollar mark by the end of the fiscal year.

Shouldn’t we have some sort of celebration when that happens?

15 trillion dollars is quite an achievement.

Most Americans cannot even conceive of a debt that large.  If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.

But the United States is not alone.  The truth is that wherever you look, there is a sea of red ink covering the planet.

The current global financial system is entirely based on debt.  If the total amount of debt does not continually expand, the system will crash.  If somehow a way was found to keep this system going perpetually (which is impossible), the size of global debt would keep on increasing infinitely.

Now the World Economic Forum says that we need to grow the total amount of debt by another 100 trillion dollars over the next ten years to “support” the anticipated amount of “economic growth” around the world that they expect to see.

The entire global financial system is a gigantic Ponzi scheme.  It is designed to keep everyone enslaved to perpetual debt.  If at some point the debt spiral gets interrupted in some significant way, we are going to witness an economic disaster that is going to make what happened in 2008 look like a Sunday picnic.

The more research that one does on the current global economic situation, the more clear it becomes that we are absolutely doomed.

So people of earth you had better get ready.

An economic disaster is coming.

First Home Buyers Strike – Is there a choice?

3 04 2011

Just over two weeks ago a campaign was started urging first home buyers to boycott buying a house in what is considered the most expensive property market in the world. In the last 48 hours, the campaign has achieved phenomenal momentum in both mainstream media and online.

The campaign was started by Tax Reform group Prosper Australia to prevent first home buyers being caught up in what could be one of the biggest real estate collapses in the world. “When the Great Australian Land Bubble bursts – just as land bubbles all around the world have – the freshest buyers are totally exposed. They face financial ruin as house prices fall below their debt. The crippling mortgage repayments become pointless,” Prosper campaigner David Collyer warned.

“We cannot help those who have recently bought, but we can warn prospective buyers – particularly first-timers whose innocence and heavy borrowing leaves them uniquely exposed.”

The Sydney Morning Herald ran a story on the strike yesterday attracting 486 comments. Later in the afternoon, News Limited papers, other FairFax papers including The Age, and a swag of international papers were in on the beat. Today, Sunrises’ Kochie interviewed David Collyer as the campaign hit top gear.

With the market already in a down swing, this could be the knife in the back to finish the job off. Scared Real Estate agents and property investors are on the defensive saying such a campaign is irresponsible and a crash of the housing market could throw thousands into unemployment.

In the Sunrise interview Kochie said “Look the market is already slowing and coming down. Yes, we have the most expensive housing in the world, You don’t want it to crash though, do you?”. David Collyer responded with “We don’t want it to crash in particular, but we suspect it will. Its gone so high and so far, when it returns to norm, it will be quite painful, a lot of people will get very hurt.”

But what are the choices?

Kochie is quite correct. Our housing market is one of, if not, the most expensive in the world and is already starting to cool. Just today, hours after the interview on Sunrise, RPdata released statistics showing National capital city house prices fell 1.3 percent for the three months to February. Darwin is leading the falls, recording a drop of 9 percent in the three months, and 6.7 percent for the single month of February. We have record level of property listings, suggesting everyone is flocking to the exits at once. Housing finance is contracting, along with personal, commercial and lease finance and building approvals are plunging, recording a 21.8 percent fall in February for total dwellings approved.

Reality is, many first home buyers are not choosing to strike – they are forced too. As the property bubble grows faster than wages, many no longer can afford to enter the market – they are priced out. Others have already done the sums and have found it is cheaper to rent. The Economist magazine found based on house price to rent ratios, Australia has the most expensive housing in the world. The glass half fall person, will immediately understand this means we have the cheapest rents in the world, compared to house asset prices.

Banks are starting to comply with new National Consumer Credit laws seeking to achieve “responsible” lending. Under the new laws, banks just can’t give loans willy neally to consumers anymore, they have to actually make sure the consumer can afford them! (yes, I know this is radical). When announcing the bill last year, Nick Sherry, Minister for Superannuation and Corporate Law said “This is a major enhancement to our consumer protection regime and is a decade overdue”. A decade?

“Some families who can in fact maintain a reasonably sized mortgage are often saddled-up with more debt than they need and often more than they can repay. This can lead to losing everything and it just won’t be tolerated anymore. The responsible lending laws will make it illegal for a lender, known as a credit provider, to extend credit for a consumer that is unsuitable based on their needs and their financial capacity.”

It’s no wonder we have quadrupled our household debt as a percentage of household disposable income over the past 30 years, with much of the fat put on in the past decade.

But even if First Home Buyers could continue to access finance to keep the market a float, is it really sustainable long term?

It’s no coincidence that retailers and businesses around the country are going belly up. The Colorado Group is the latest causality, calling in the administrators yesterday. The group owns 434 stores Australia wide under the Colorado, Mathers, Williams, JAG and Diana Ferrari labels and employees 3,800 staff. It follows collapses of Ed Harry, Angus and Robertson, Borders etc with the Administrators of Angus and Robertson announcing the closure of another 12 stores today and the loss of another 102 staff. Retail veterans such as Myer’s Bernie Brookes has never seen the consumer so fragile over his 30 years of retailing. As housing expenses continue to outpace household income, less money is available for discretionary spending among our retailers employing 11 percent of the population and accounting for 19 percent of GDP. Quite possibly the retail and support staff losing their jobs will find it hard to service their mortgages, eventually leading to the collapse of the housing market. After all, the housing market was cooling well before the 15th when Prosper announced the campaign.

Australia’s housing bubble is not based on any fundamentals, but is (was) growing on the continued expansion of credit and immense speculation. Its not sustainable, and will collapse regardless of a strike of first home buyers. As David Collyer warns, Its gone so high and so far that when it returns to norm, it will be quite painful and a lot of people will get very hurt.

» Prosper Calls for Buyers Strike – Prosper Australia, March 15th 2011.
» First Home Buyers – Property Buyers Strike – GetUp! Petition Site .
» Don’t Buy Now! Property Buyers Strike – Facebook Page
» Online campaign targets high cost of housing – The Sydney Morning Herald, 30th March 2011.
» Beware a ‘buyers’ strike’ in property – The Sydney Morning Herald, 31st March 2011
» First home buyers ’strike’ growing – The Adelaide Advertiser, 31st March 2011.
» First home buyers urged to go on strike – The Sydney Morning Herald, 31st March 2011
» Australian home buyers ’strike’ over inflated house prices – The Telegraph (UK), 1st April 2011 Thursday March 31st

House Investors to Lose Interest

3 04 2011

National Australia Bank finance chief Mark Joiner yesterday said the property market was fully valued and likely to languish.

“I don’t think property can go up from here,” he said.

“It’s at the top of the range on affordability. It’s well out of line internationally.”

House Investors to Lose Interest

Full Meltdown in Full Swing? Japan Maximum Nuclear Alert – Who do you believe?

1 04 2011

The question one must ask is if we are not directly affected by the radiation fallout (according to mainstream media), then what is going to be the economic consequences and effects to Australia and New Zealand?