Downward pressure on wages, the casualisation of the labor...

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    Downward pressure on wages, the casualisation of the labor market, short term contracts, lack of full time stable positions has led to a reduction in consumer confidence, therefore people are less inclined to spend and more inclined to save.

    Increasing your savings is great for the individual, but for the economy its a slow death, and its been a trend for a few years.
    Reduced demand for products, services will see business start to cost cut to reduce overheads, to help increase their margins.

    Putting even more people out of work, or into reduced hours.

    You can already see it in stores, everyone is reducing prices to compete with the shrinking demand.
    The only prices really going up are necessities such as utilities.

    Australia is entering a very dangerous situation. Low wage growth, low interest rates, the majority of society leveraged to the max, being burdened with large home loans, federal debt at a 500billion, state debts also which are enormous.

    The government will not have much wriggle room this time round when the S@#t hits the fan, no excessive stimulus programs, not much further to go on interest rates. GDP receipt predictions are down year in year out, as low commodities prices, blow out budget deficits even more.

    When interest rates start to creep up which is beginning to happen, a lot of people will get burnt.
    A $500,000 loan at 4% is $20k in interest a year. Roughly $384 a week in interest a lone.
    When rates rise to 5.5% and beyond, the interest payment will rise to $530 a week @ 5.5%.
    Pair that will living expenses, fuel, car loans, credit card debt many will struggle to absorb the rate rise cost.

    Those in interest only loans, will struggle to refinance also, as banks become stricter with their lending.

    Cheap credit & foreign investment is the only thing that is fuelling this bubble.

    Everyone has been sold this fantasy of becoming a real estate tycoon, with multiple investment properties, leverage @100% or more. Those did so years ago are laughing, but those who have entered the market in the last 2-4 years will really be hurt in the coming 18-24 months.
 
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