From the Sydney Morning Herald:
The Australian economy is set to grow further in 2010, but household financial conditions are deteriorating to the extent the nation could experience a W shaped economic recovery, a report shows.
Melbourne Institute bulletin of economic trends shows the domestic economy is set to grow by 0.8 per cent in the March quarter and by 0.6 per cent in the June, September and December quarters.
But the report’s household financial conditions index fell 16.6 per cent to 28.8 index points in the March quarter of 2010.
It was the first fall in the index after four consecutive quarters of improvement.
More than half of the 14.4 per cent households who consider themselves to be financially stressed, are employed while employed people with a household income of over $80,000 are the most financially stressed out of all income groups.
The report said part of the deterioration in financial conditions was due to the increased need to service household debt, in particular mortgage debt.
This report indirectly highlights the very real danger of Australia’s unprecedented level of private debt. And in particular, mortgage debt.
Economist Steve Keen, who predicted the GFC in 2005, is Australia’s leading proponent of the argument warning against high private debt levels, and against government policies which have dangerously inflated Australia’s private debt, such as the First Home Owers Boost.
Visit Professor Keen’s ‘Debtwatch‘ website to learn more.
On April 15th through 23rd, I will be joining Professor Keen in his 230km “Keenwalk” from Parliament House to Mount Kosciuszko, in protest against Australia’s property (and debt) mania that has been driven directly by Federal Government and RBA policies.
Please consider joining us, for the whole trek or even just for an afternoon section of the walk.
If you’d care to assist a genuinely worthy cause, then please consider sponsoring Professor Keen, or indeed myself. Funds raised will support the wonderful charity Swags For Homeless.