Friday, September 12, 2014 10:04:07 PM
Since Krugman has some concern with Canada's position
"And what the Canadian example shows is that this can work. Canada is prosperous, economically stable (although I worry about high household debt
[ http://krugman.blogs.nytimes.com/2011/03/04/oy-canada-2/ ] and what looks like a major housing bubble) and has successfully pursued policies
well to the left of those south of the border: single-payer health insurance, more generous aid to the poor, higher overall taxation."
and as the others there also apply to Australia vs USA, I guess he could have a concern with Australia's position, too.
Image from Krugman's link above
Two of the images in .. 4102.0 - Australian Social Trends, 2014
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 06/05/2014
[ Though perhaps the 'since mid 2007' below could be a bit of a caveat to Australian concern ]
Debt compared with income
Income is an important consideration when deciding on a household's capacity to make loan repayments in full and on time. Household debt increased more rapidly than household income from early in 1993 until the middle of 2007. Since mid 2007 (and the GFC), household debt has tended to rise in line with household income. At the end of 2013, the amount that households owed was nearly 1.8 times the amount of disposable income households received during 2013.
SIZE OF HOUSEHOLD DEBT COMPARED WITH ANNUAL INCOME(a)(b)
[ ese two are adjacent inside ]
SIZE OF HOUSEHOLD DEBT COMPARED WITH ANNUAL INCOME(a)
in Australia, Canada, France and Italy
in the UK, Japan, the USA and Germany
http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/4102.0main+features202014
There is some concern of prominence in Australia, too.
RBA Governor voices concerns over low interest rate ‘bubble’
4 September 2014
Reserve Bank of Australia Governor Glenn Stevens has voiced his concerns about a correction in Australia’s housing market and the effect low interest rates are having on the market.
Mr Stevens spoke about the creation of asset bubbles in the current low-interest rate environment at the recent Committee for Economic Development of Australia (CEDA) lunch in Adelaide.
His concerns were that despite assurances from the four big banks that current house prices and levels of household debt are sustainable, popular markets in cities like Sydney and Melbourne were in danger of creating a housing bubble.
"As for things that monetary policy should try to avoid, we are also cognisant of the fact that monetary policy does work initially by affecting financial risk-taking behaviour," Mr Stevens said.
"In our efforts to stimulate growth in the real economy, we don't want to foster too much build-up of risk in the financial sector, such that people are over-extended. That could leave the economy exposed to nasty shocks in the future.
"The more prudent approach is to try to avoid, so far as we can, that particular boom-bust cycle," he said
"It is stating the obvious that at present, while we may desire to see a faster reduction in the rate of unemployment, further inflating an already elevated level of housing prices seems an unwise route to try to achieve that."
REINSW President Malcolm Gunning said the RBA made the correct decision to keep interest rates at 2.5 per cent, but warned consumers of the potential increase.
“We must once again caution those seeking to take out a mortgage to ensure that they are realistic with their abilities to service debt. Interest rates will not remain at these record lows and future interest rate increases must be factored in,” Mr Gunning said.
http://www.reinsw.com.au/-Main-heading-RBA-Governor-voices-concerns-over-low-interest-rate-bubble-/default.aspx
Gawd, those on iHub, lol, we all know them, who have been gleefully dancing the Australian doomsday now/anytime/really! tomorrow housing bubble trouble jive
FOR YEARS, and all those advertisement? things!!! on sooooo many internet sites, even on YouTubes, must be salivating in HOPE and anticipation that finally,
after some 10 years, they just might be able to say "I told you so". To them, IF ever, i say, "Off the pot, Sot, you said years ago it was going to happen then. Didn't you."
"And what the Canadian example shows is that this can work. Canada is prosperous, economically stable (although I worry about high household debt
[ http://krugman.blogs.nytimes.com/2011/03/04/oy-canada-2/ ] and what looks like a major housing bubble) and has successfully pursued policies
well to the left of those south of the border: single-payer health insurance, more generous aid to the poor, higher overall taxation."
and as the others there also apply to Australia vs USA, I guess he could have a concern with Australia's position, too.
Image from Krugman's link above
Two of the images in .. 4102.0 - Australian Social Trends, 2014
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 06/05/2014
[ Though perhaps the 'since mid 2007' below could be a bit of a caveat to Australian concern ]
Debt compared with income
Income is an important consideration when deciding on a household's capacity to make loan repayments in full and on time. Household debt increased more rapidly than household income from early in 1993 until the middle of 2007. Since mid 2007 (and the GFC), household debt has tended to rise in line with household income. At the end of 2013, the amount that households owed was nearly 1.8 times the amount of disposable income households received during 2013.
SIZE OF HOUSEHOLD DEBT COMPARED WITH ANNUAL INCOME(a)(b)
[ ese two are adjacent inside ]
SIZE OF HOUSEHOLD DEBT COMPARED WITH ANNUAL INCOME(a)
in Australia, Canada, France and Italy
in the UK, Japan, the USA and Germany
http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/4102.0main+features202014
There is some concern of prominence in Australia, too.
RBA Governor voices concerns over low interest rate ‘bubble’
4 September 2014
Reserve Bank of Australia Governor Glenn Stevens has voiced his concerns about a correction in Australia’s housing market and the effect low interest rates are having on the market.
Mr Stevens spoke about the creation of asset bubbles in the current low-interest rate environment at the recent Committee for Economic Development of Australia (CEDA) lunch in Adelaide.
His concerns were that despite assurances from the four big banks that current house prices and levels of household debt are sustainable, popular markets in cities like Sydney and Melbourne were in danger of creating a housing bubble.
"As for things that monetary policy should try to avoid, we are also cognisant of the fact that monetary policy does work initially by affecting financial risk-taking behaviour," Mr Stevens said.
"In our efforts to stimulate growth in the real economy, we don't want to foster too much build-up of risk in the financial sector, such that people are over-extended. That could leave the economy exposed to nasty shocks in the future.
"The more prudent approach is to try to avoid, so far as we can, that particular boom-bust cycle," he said
"It is stating the obvious that at present, while we may desire to see a faster reduction in the rate of unemployment, further inflating an already elevated level of housing prices seems an unwise route to try to achieve that."
REINSW President Malcolm Gunning said the RBA made the correct decision to keep interest rates at 2.5 per cent, but warned consumers of the potential increase.
“We must once again caution those seeking to take out a mortgage to ensure that they are realistic with their abilities to service debt. Interest rates will not remain at these record lows and future interest rate increases must be factored in,” Mr Gunning said.
http://www.reinsw.com.au/-Main-heading-RBA-Governor-voices-concerns-over-low-interest-rate-bubble-/default.aspx
Gawd, those on iHub, lol, we all know them, who have been gleefully dancing the Australian doomsday now/anytime/really! tomorrow housing bubble trouble jive
FOR YEARS, and all those advertisement? things!!! on sooooo many internet sites, even on YouTubes, must be salivating in HOPE and anticipation that finally,
after some 10 years, they just might be able to say "I told you so". To them, IF ever, i say, "Off the pot, Sot, you said years ago it was going to happen then. Didn't you."
It was Plato who said, “He, O men, is the wisest, who like Socrates, knows that his wisdom is in truth worth nothing”
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