Australian economist John Adams of Adams Economics (www.adamseconomics.com) and banking expert Martin North break down the latest developments in Australia in the wake of the federal election held last weekend.
With the Australian property and household debt bubbles in the process of collapsing during the first quarter of 2019, the re-elected Federal Government has launched the most extreme set of policies that are now designed to stabilise ‘credit growth to housing’ and to reflate the housing market.
The Government and Australia’s economic establishment is now seeking to:
– cut official interest rates to their lowest level on record;
– water down bank underwriting lending standards;
– implement income tax cuts;
– introduce a new home owners scheme that requires first time buyer to only put 5% down
These are extreme measures that seek to kick the can down the road and add additional layers of debt on the largest Australian debt bubble in history.
This latest attempt shows that the establishment is getting desperate. They are effectively throwing the kitchen sink at the bubble praying for the bubble to continue. Australians won’t know under September whether these policies have been effective, but in the process, this will only result in the debt bubble growing to even higher astronomical levels.