Comments on: Government Spending and Debt Worse than Personal Spending and Debt

By: cb

cb — Thu, 17 Sep 2009 05:19:14 +0000

BB, as unlikely it is for something sensible like that to happen, it even less likely that we will have the additional two elements we should have for shaking ourselves to our own senses:
1. Sound money, not this cheap sh!t that banks conjur into existence on their keyboards.
2. Decent and fair guidelines on lending, so that availability of credit is equitable, and not porked to connected interests.

Something along these lines would make a vast financial industry to shrink and those working in it would easily find work in other, productive areas of a booming economy that would be likely to result. A bloated finance industry, just like a bloated government and public service sector, are more of a dead weight on the economy than anything else. You need some of both, but not like we have at the moment.

But I must admit that I am no expert in this area at all, and these are just my vague impressions, and not a worked out and seriously held view or position.

By: N

Thu, 17 Sep 2009 05:13:26 +0000

BB – that’s a very poor analogy (sorry to spoil a good story)

In the village, the wealth of each person was $100 asset minus $100 debt = $0. The overall wealth of the village was also $0, before and after the rich tourist.

Nevertheless, every villager was expecting to use the interest income from their debtors to retire early to a canal side estate with cheese & wine lifestyle. Obviously this was a hallucination in a zero sum economy. With all the “debts” written off they also wrote off the future income streams that propped up the house of cards.

This is what debt repudiation has not been explored as real solution to the ongoing crisis. We all must believe that we can get rich by selling ourassets to each other at ever higher prices, funded by ever higher levels of debt. That delusion will eventually fall apart.

By: Peter Fraser

Peter Fraser — Thu, 17 Sep 2009 05:02:00 +0000

BB I was referring to your post earlier today when you said “but Peter Fraser has to be an agent or property investor no risk. And please, no more gratuitous advice. Thanks but I tend not to listen to what real estate persons have to say about property prices as it is rather predictable.”

I don’t think that I have misconstrued that, but if I have I apologise. I get upset when posters automatically brand people because of their work, rather than listening to what they say and making a judgement on the content.

On your above post all borrowers are not debt junkies, most businessmen borrow to maintain or expand their business, and are not speculating in property, although an element of risk is always involved in business lending. Most homebuyers are looking to provide a roof over their families heads, they are not speculators.

Perhaps we got off to a poor start with the 9mm issue, but your subsequent posts appeared intelligent, so I was able to overlook that. How about you do the same.

I have some knowledge so I am happy to answer any questions, and you can judge me on those answers, but just pointing and name calling won’t do. Alternatively you could ask someone who doesn’t know anything if you are not interested in knowledge. It is up to you.

By: cb

cb — Thu, 17 Sep 2009 05:01:48 +0000

Let me see, ….. I lost $$$ on T1. Then T2 came along and I thought, ok, let me make some of those losses back on this one. Result: Lost another $$$$$$$$. Darn. And just when I thought of giving up, T3 is dished up, and I thought, you surely can’t lose the third time on it. Result: Lost another $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$.
Lesson: If government has anything to do with it, keep well away from it, whatever ‘it’ might be. I also suspect that the CBA working out fairly well was a fluke. It must have happened in spite of government.

By: cb

cb — Thu, 17 Sep 2009 04:56:32 +0000

lol, BB, and of which, you might say, yours truly happens to be one, hahaha.
Thank goodness I still recognise a junkie when I see one, hahaha.
Well, I guess, that is what govt does, isn’t it? If it happens on a good idea, it will flog it off to suckers and then “regulate” them to death. Isn’t that exactly what they are doing, again, now, with Telstra?

By: cb

cb — Thu, 17 Sep 2009 04:52:01 +0000

hmmm, and those not wanting to hear bullish bad news, or anything that might question Sayce’s apocalyptic pronouncements, could save themlves the aggravation being served up here by simply reading his posts sent out by email.

By: BB

BB — Thu, 17 Sep 2009 04:44:19 +0000

Sorry PF but if you check back on your comment I think the phrase “what on earth are you talking about now” in referring to my pathetic attempt at creative brevity could be construed as being ‘trite’ rather than informative. Be that as it may I reckon cb’s idea of St. Kev the Stimulator borrowing on our behalf at ultra low rates to directly finance our private debt – in effect bypassing the Banks – sounds great! Perhaps he could even call it the ‘Commonwealth Bank’ or has that already been done before? Wonder what the big 4 pillars would think about it though not to mention those that earn their living by picking up their margin from the merry go-round of brokering loans from these institutions to salve the consumption fix of Australia’s ravenous debt junkies!

By: Peter Fraser

Peter Fraser — Thu, 17 Sep 2009 03:57:09 +0000

Dennis Graham,

I post on several sites and have never hidden my occupation as a finance broker. Posters from all sides of the argument will attest to that.

I am seeking good quality information and feedback on the market. Why does that make my opinion less than yours?

What is your contribution but a further trite comment. Surely you can do better than that.

BB appears to be an intelligent person, so it was disappointing that he simply dismissed me with assumptions because he did not agree with me. It appears that I was too well informed, well finance is my business, so naturally I am well informed on the subject. Do you want information from someone who knows nothing? What use would that be. I gave him information on an honest basis, I can’t help it if he was not able to recognise that.

If posters wish to have a voice please use your intellect before you type.

By: cb

cb — Thu, 17 Sep 2009 03:36:08 +0000

Hey, bb, so here is then a serve on the subject of debt.
What would seem to be one of the more worthwhile borrowing exercises our Santa Rudd govt could and should undertake, would be to borrow as much money from overseas at a rate that only our govt can borrow, and then use that to refinance all the private debt at sifnificantly lower rates than we are being forced to pay now. That could potentially cut our debt servicing burden bay a third or more, and would allow us all to breath much more lightly. That, IMHO, would be much better than distributing all that borrowed money ON TOP OF, INSTEAD OF, the massive debt with which we are already being weighed down. What says you?

By: cb

cb — Thu, 17 Sep 2009 03:27:36 +0000

Hello bb, now that is a relevant point you make in saying that ” it baffles me why this particular thread seemed to always hark back to property? There are others that deal with property prices but this theme is about debt.”

I suppose that we kind of got lost a little bit with the main subject, because there is probably not that many here who disagrees all that much with regard to the undesirability of increasing the national debt load. I did make an attempt, if you check back, of sounding some misgivings about the subject being as black and white as Sayce is presenting it, but a discussion did not get off the ground.

Plus, the fact that Sayce still hasn’t posted his 15 September missive that again touched on property, another thread on property got off the ground here, as it was the most recent posting somewhat still close enough to bear the subject.