So, I am not quite sure what to say. Under whatever standard, including a gold standard, if those entrusted with the safeguarding of the nation’s earnings and savings purchasing power decide to be crooks, then that is what they are going to be, and the good people will be the ones to suffer. My personal conclusion from this would be that the only way one could protect oneself against such risks would be to keep the cash portion of one’s savings in actual, physical metal.

1. Could there have been sound money without a Gold standard?

2. Could there have been a real estate bubble and services economy without a funny money facilitated current account deficit?

I contend yes to the first question if debt service costs and rents become measured as part of the CPI basket after the current bubble has burst. The CPI basket itself must in future be acknowledeged as being constantly subject to manipulation and attack by inflationists and consequently there must be an Austrian minded oversight of money supply excess; one that is not the instrument of rate adjustment but the reserve power that calls severe trade weighted & money supply imbalances and adds such penalty rates required to redress them.

2. My answer is no here, for all the current account deficit countries. There is no point of difference for Australia’s recent “hold” effected on the real estate bubble because the funny money is still very much in play (at least until recent days or as reflected by speculators in past months interest rate swaps) for a country that has exploited both a carry trade & a sovereign guarantee of bank funding that has not been available to any other major economy (don’t count NZ because they too are on Australian 4 pillar balance sheets courtesy of their branch offices). So that means the bubble will pop here even louder than it has in the US, UK, and the PIIGS the second the AUD dives (and that could be any day now).

he said: “within months” – does that mean that interest rates will also be back at 10% within months??

http://au.news.yahoo.com/thewest/business/a/-/business/6720211/forecasts-put-wa-back-in-boom-business/

Did anyone see this article in the Daily Telegraph about Westpac reducing its LVR?
http://www.dailytelegraph.com.au/news/sunday-telegraph/tighter-credit-rules-to-halve-home-loans/story-e6frewt0-1225822838856

It’s a good article (and not a story that was widely publicised) but they still managed to sneak a few quotes in from a property spruiker. Like this from a Mortgage Choice broker:
“It’s a very worrying development because if others follow suit, we could see the majority of first-home buyers priced out of the market.”

It might be a worrying development for this Mortgage Choice broker because his commissions will be slashed if there’s a property crash. But for potential first-home buyers, I reckon this is great news. Because ironically, it is this cut in bank LRVs that could bring about a crash in property prices that the banks have been so desperately trying to avoid. A crash that will price first home buyers back into the market.

My guess is that that in 4 years time, house prices will be at least 40% cheaper.

And if I’m wrong, I’m going to walk to the train station in the mornings, instead of driving.

Otherwise, you can find it on the IPA’s website under the title: Climategate: What we’ve learned so far