And now for something completely different
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A few years ago I realised that we were in a housing "get rich quick" mania. How was it, pondered I, that a reasonably well paid programmer like myself could not afford a slightly above average dwelling? Was I spending too much on booze?
A few years down the track it seems like it's coming to a head, or a pop so to speak. The media and public are finally going through the wake up process. Which means affordable houses are on the way finally.
So here is my final analysis for anyone who cares to throw rotting vegetables at me. The ABC of human fantasy and delusion, in truely historic proportions.
A. BANKS LENDING TO ANYONE AND ANYTHING In the past, people without proof of income or ability to save were bad risks, now they are good debtors. This is because they are all simultaneously becoming rich as their houses rocket in price. Bank call centre operators now routinely talk-up your credibility. (You're worth more than that! Here have more! Higher limit for you!)
B. GOLD STANDARD DUMPED BY NIXON UNLEASHING EASY MONEY In the past, Governments systemically ruined their paper currencies through inflation when not backed by tangible assets (eg gold). Now, they no longer need the discipline since human nature has been transformed. Greed and incompetence are no longer features of the human creature.
C. PEOPLE DONT HAVE TO WORK ANYMORE Productive economies used to be based on producing things. Eg blacksmiths are valuable because they can fashion metal into useful things. Now, economies can be based on the 'greater fool' theory of selling houses for more than you got them because house prices go up, always and forever, amen. ("Greenspam" original sin).
So has the world really changed in this way?
If so, my only option is to dig a hole since houses must necessarily become priceless. All humans therefore will return to mountain caves and gaze down upon the sprawl of empty 4 bedroom dwellings with granite benchtops.
If not on the other hand, then we are heading into the biggest wake up call in human history. They will call it a bubble when they are financially ruined and not a moment before.
* Greenspan Original Sin coined by the great Golden Jackass Jim Willie.
Learn about the Aussie bubble.
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