The Asian Markets didn't make any significant moves as of this morning. And our market is up today. What did I miss Jody?
Brian
The Australian Market droped 4%
This is a transcript of an interview of someone who said this was comming ten years ago..
Thank you for your email.
Hope this transcript helps re Segment on Economic Troubles with Steve Keen.
- Steve Keen, professor of Economics at the University of Western Sydney, is sure
we're in or approaching the next Great Depression.
- He is going to sell his apartment in Surry Hills, cash out his Super, and rent an
apartment because he thinks he'll end up saving himself time and money.
- He says that housing prices will fall a further 40% in the next few years, so he
doesn't want to see his retirement slip away.
- Steve has been warning about a Global Financial Crisis for almost 3 years now, and
has largely been ignored by fellow colleagues.
- He blames the current crisis on the amount of debt Australians and Americans
currently hold. In Australia, the debt is 165% of our GDP, which about twice as
high as right before the Great Depression
- According to Steve, debt should be about 25-30% of GDP, which means we've got a
long way for it to come down.
- He says that the depression could hit anytime in the next few years and could last
well more than 10 years.
- He also says we should see another 500-1000 points come off the ASX before it
bottoms out.
- When asked about the Trillion Dollar Bailout in the U-S, he says that it's just a
band-aid that could morph the problem from rapid deflation, to hyper inflation.
He's afraid it could start another housing bubble that would further destable the
economy.
- His advice is for older people to cash out while they still can.
- For younger people, he says get ready for incredibly high unemployment. They need
to find a job that will remain stable and in fields that are necessary for people to
survive.
GREAT DEPRESSION STATISTICS
- Australia is thought to be one of the hardest hit Western countries by the Great
Depression
- Unemployment reached an amazing 29% in 1932, one of the highest in the world.
- Australia had an incredible dependency on exports, which fell apart after the
stock market crash of 1929.
- After WWII, a socialist style government stepped in and reformed the country to
take on government interventionalist tactics to prevent another total collapse from
happening.
STEVE KEEN
- Every bear has his day and this is Steve Keen's. The associate professor in
economics and finance at the University of Western Sydney has been warning against
the debt bubble for years, in print (with his book Debunking Economics) and with his
Debtwatch Report podcast and Debunking Economics website.
- Keen was born in 1953 - in a time of low debt, he points out, when the nation was
bent on building up industries. His father was a bank manager whose only debt was a
mortgage ("at 3 per cent") on the family home.
NEED TO KNOW: (5 key facts)
- Steve Keen, professor of Economics at the University of Western Sydney, is sure
we're in or approaching the next Great Depression. He is going to sell his
apartment in Surry Hills, cash out his Super, and rent an apartment because he
thinks he'll end up saving himself time and money.
- He says that housing prices will fall a further 40% in the next few years, so he
doesn't want to see his retirement slip away.
- He blames the current crisis on the amount of debt Australians and Americans
currently hold. In Australia, the debt is 165% of our GDP, which about twice as
high as right before the Great Depression. According to Steve, debt should be about
25-30% of GDP, which means we've got a long way for it to come down.
- When asked about the Trillion Dollar Bailout in the U-S, he says that it's just a
band-aid that could morph the problem from rapid deflation, to hyper inflation.
He's afraid it could start another housing bubble that would further destable the
economy.
- His advice is for older people to cash out while they still can. For younger
people, he says get ready for incredibly high unemployment. They need to find a job
that will remain stable and in fields that are necessary for people to survive.
Q: WHY ARE YOU SELLING YOUR HOUSE TO RENT AND CASHING IN YOUR SUPER?
- We are in the greatest downturn since the Greatest Depression. He's been saying
this for 3 years. And it's not just us - most of the developed world is in the same
situation, and it's not changing anytime soon.
Q: WHAT FRIGHTENS YOU THE MOST DURING THIS ECONOMIC TURMOIL?
- expect to see housing prices drop 40-50% over the next 10-15 years. This is
coming off Japan and their bubble that burst during the 90's. Since then, prices
have fallen 70%.
- Australia isn't quite as badly overvalued as the US market. Another 500-1000
points should fall off our stock market before it starts to stabilize. He says the
US should lost another 40% off of theirs!
Q: DO YOU THINK THE TRILLION DOLLAR BAILOUT WILL WORK?
- No it will just change the nature of the disease. If it works, it'll turn it from
serious deflation to runaway inflation. This is nothing more than a band-aid rather
than something that will fix it. If it does what they want it to, we could see
inflation shoot through the roof and another housing bubble form.
Q: WHAT WILL IT TAKE TO GET THE MARKETS AND THE ECONOMY BACK ON TRACK?
- We need to drastically reduce our debt levels. That is the only thing that will
bring our economy back on track. As it stands, our debt level hovers around 165% of
GDP. That needs to be reduced to 25-30% otherwise we will continue to see drastic
declines.
Q: WHAT IS YOUR SUGGESTION TO PEOPLE, BOTH OLDER AND YOUNGER?
- For older people, they need to get out of the stock market now and cash out their
supers before everything falls apart.
- For the younger generation, brace yourself for high unemployment and difficult
times. Cash out but get yourself secure employment. Any profession where people
have to spend the money is one that won't go away easily...
Q: HOW LONG UNTIL THIS WILL TURN AROUND?
- This whole process could take 10-15 years of bad times before it is corrected.
Regards
TODAY SHOW
team
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-----Original Message-----
From: ndowns@hunterlink.net.au [mailto:ndowns@hunterlink.net.au]
Sent: Tuesday, September 30, 2008 3:34 PM
To: TCN Today Show; currentaffairs@ninemsn.com.au
Subject: today Feedback: Looking for a story you had on monday the 22nd I think
Name: Noel Downs
Telephone Number: 02 65431288
Email Address: ndowns@hunterlink.net.au
Subject: Looking for a story you had on monday the 22nd I think
Your Message: Hi,
On Monday the 22nd Sept. (I think). I'm told there was an interview with a
gentleman who called the current financial crisis a depression and suggest people
cash their super to pay their mortgage... But I have not been able to find it...
Can you help ?
Thanks
Noel
