Do you think australia will go into recession next year?

Its a big topic and something that will affect all of us.

If some of yous dont know what it means the def is as follows:

"Recessions may be associated with falling prices (deflation), or, alternatively, sharply rising prices (inflation) in a process known as stagflation"

Im sure you all have been affected by the recent hikes in prices across all ranges (fuel, food, property, interest rates etc)

Anyways, America is in recession now and they are trying there best to hide it. I have a feeling aus will soon follow and perhaps other big nations.

Biggest example is the US dollar. Its declining (weakning) against other currencey!!
Our interest rates just keeps going higher and the banks say there will be a slight increase in interest rates soon

But anyways who knows what will happen.

What you think about all this.

Yes i do understand this a big topic of discussion, but will be good to hear some interesting replies..

Peace out..

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Recession in US,yes. As the 2 biggest lenders are asking to be bailed out by the US government.

Here in Aus? Well its nowhere near as bad as the US but i fear in the next year we might get a hint of it, as oil prices are climbing at a rate of knots and just this morning i hear that Aus wide the price of real estate dropped. Which we have not seen since before the last recession.

Im not saying this drop is the sign we are going into a recession,could just be a coincidence.

But seriously the price of fuel,food,utilities is becoming a joke. Wages are not keeping up with inflation which adds to the vicious circle.

We are currently in the biggest credit bubble ever.

Credit for the last 30yrs has grown out of proportion compared to GDP in australia.



1st bump - 1890s land boom. 2nd bump = roaring 20s then great depression. So just imagine what is happening here..........next.

Unfortunatley for most of Australia, this credit is in the form of home loans and just like the US, we over paid for our houses, while the average home was, 6-8x the average household income.
We are already seeing mild corrections, if not stagnation, or falls in real terms of house prices since 2005-6.

This is why we may quite well see a depression, not recession, hit our shores. People have been buying up big with money they don't have. It's inflated house prices that has caused this mania, with people thinking they are rich because the house next door has trippled in price, so they might as well borrow against the house, and use it as an ATM.

All of this along with how the current financial system works.....It requires steady "growth" to continue to work.
I wont go into detail but pretty much, when you borrow $X you need to pay it back in the future + interest. That interest is borrowed from the future.
So you always need more money in the future to pay for the money borrowed in the past. This system can not handle the amount of growth we have had in the last 30yrs. We are at a point where we need more future to pay back the money than anyone could possibly forsee. Also a deviation from the gold standard has helped this become a issue.

Also, fractional banking has some to do with it as well, that and the way US wall st invesment bankers have pretty much created complex investment vehicles that no one understands and then on sell to others who think they are buying a good investment when really it is crap AKA sub prime mortgages. Then people come in to collect and it all falls to bits.......

Then you have git's like Bush spending more on the war than the amount that would be required to stop whole subprime crisis........over $500 billion.


It looks like the latest bubble is in energy (including oil) as the fears of it coming to an end close. Anyone remember similar statements about housing? "Buy before they get too expensive" "house prices only ever go up" "they aren't making anymore land" etc etc.

Similar comments being made about energy wouldn't you say?


So in closing, that sounded cool 8) (I tried to keep it brief, and probably missed alot) I see some major changes to the world banking systems as this current system fails to deal with the population growth, without having the negative side effects of inflation or stagflation.

A major change is about to happen..........................................................

Oh yeah, and along with Bush's war spending, which is argueably making it's way through companies, into his, and his family & friend's pockets, is the way the US is inflating their way out of the current debt they are in as a nation.

They are devaluing the US dollar (part of the reason why oil price is so high, as it is traded in US dollars) and as the worlds' reserve currency it is having ill effects on economies who hold large amounts of US dollars................China is one of them.

We may require some revaluation of world currencies (possibly a new US currency?) to take over the currencies around the world.


Look at Zimbabwe right now for example? compared to the US dollar, it is in a bad way, but the US dollar compared to almost any other currency in the world is also in a bad way.


Not a good thing for the biggest (false?) economy in the world...........

Dont think we will hit recession but we are currently heading for massive changes, inflation is still on the up, only stupid tactic to try and curve the rise is being done.

australia's credit crisis is the major impactor in the current inflation spike. stupid interest rates increases, then giving tax breaks is not going to fix inflation.

something needs to be done to curve credit, people are simply spending beyond there means, and on credit exagerating future inflationary pressure.

Seems to me anythings possible in this climate, realestate has been on the up and up for the last ten years, seems to me the 10 years before that it was stagnant, may very well happen again, who knows.

I thought its traded in Euros now? Or perhaps i read your sentence incorrectly?

Oil is still sold in USD per barrel, if our dollar wasnt so high against the us dollar we would already be paying more than 2$ a litre in petrol. Bare in mind a few years back the Aussie dollar was around 55c to the USD I think.

we are f**ked....

As long as China and India keep buying our base metals and the price of production can be kept at a reasonable level the music will continue to play...2 more years

And when they stop we're f**ked

Forget about building more efficent cars, we need to stop the banks from lending money.....

Personally I think hydrocarbon powered cars will be main stream for atleast 10years, my bet is more. Anyone heard of oil sands??? There is so much oil left in the world its a shame really given the greenhouse gas thing...Which I'm not sure is even real....Do some research about the air quality in the USA after 50 Mill people went with out power for 1 day..just 1 day. The earth is amazing at cleaning the atmosphere.

Anyways, recession....I thought recession occured where the economy shrank, rather than grew, nothing to do with inflation or deflation.

Australian's have been bitching about rate rises for what 6 years now, given the long term trend is like 8% anyways, we have it pretty good. Its because of the high rates that our outlook for the next few years is so much better than the USA, if they lower rates anymore, it wont do much anyway.

Im too young to remember the 92 recession, where a famous Labor leader declared we had to have one, but I have read how the economy was coasting along ok, but the rate rises weren't working real well, then the economy snapped, and it shrunk, hello recession.

While as a nation we aren't in recession (thats what our trade figures show, thank the mining exports for that---but watch that create even more inflation), the money turning over on the street has just stopped---Has it snapped??? My god, I hope not.

For the first time, I am worried about my job, at work we aren't just missing targets, but running at a loss. We are doing what we can, but if customers ain't got the folding, then we gonna have to cut costs.....Jobs....

IMHO, if we aren't in an official recession by Xmas, then April will more than likely show it.

Warren Buffet, the worlds best investor, and richest man depending on how it is measured, sums up a recession where the general public have less money than before. He said nearly 6 months ago the USA was in recession. Since then the USA has lost a horrible number of jobs....Starbucks sacked 12,000 staff alone!!!! And profits and losses in the USA keep getting worse.

We have liars who get up on tele and say that we wont hit recession because of mining. We thats great for those in mining, but for those of us out of mining, in the cities, and country, will suffer, because our incomes will be so low compared to that of mining, which will continue to push up prices of everything. Oil, food, clothes, etc.

The jury is out on property at the moment, but those out there that are the genuine rich and entreprenuers, are looking forward to the drop they predict in housing.

Alls I know is, it ain't gonna be pretty over the next 2 years....

Oh forgot to mention, as for local inflation, thank your Federal government for lying about Governement spending which is higher than last year in dollar figures (as opposed to percentage of GDP), and their pay rise that they just handed the lower wage earners (I know they are doing it tough, but in this economy as it stands we had to be crue to be kind). Both inflationary items. Thanks Mr. Rudd. Not!

The problem with the oil sands though, is sure theres a lot of it, but its going to take a few years to build up production and it is pretty enviromentally destructive, they may help in the long run, but not in the next few years yet.