Posted to Herald Sun (18/5/2011) on 18/5/2011 at 1:53 AM
Commenting on "Debt spiral looming for Australians"
http://www.heraldsun.com.au/news/more-news/debt-spiral-looming-for-australians/story-fn7x8me2-1226057787036
Australia is definitely heading towards a recession. The truth lies in the trilogy of negative demand - real properties, cars and household items.
In recent months, the supply of properties in the market has increased, but there are many people who cannot afford to buy. They have neither the earning capacity to convince the bank to lend them money, nor the ability to repay after the initial down payment. Renovation market has also slowed down.
Car is the largest personal asset item. Car sales have also slumped, and compounding the problem is the increasing petrol prices which turn away potential buyers from buying bigger cars or 4-wheel drives.
David Jones, Myers and JB HiFi are reporting slow sales for the past few months. This is the third and critical negative demand that puts the nail in the economy coffin.
Glenn Stevens and his RBA team are just not good enough to come up with inaccurate forecasts month after month. Sitting in the boardroom, looking at graphs on computer and talking with big businesses and then come up with the economic rationale to increase interest rate is unacceptable. Not all Australians are miners, and not all 95% employed are full-time workers!