1. 107 Posts.
    What seems to be the driving force of retail sales and housing sales is sentiment and confidence. Although almost every country in the world had a sentiment change in the past 3 years, Australia continued on, almost insulated and oblivious to the state of the worldwide economy.
    It has only been recently that I have noticed a change here in Newcastle. Its not really spoken about, but there is an air of uncertainty. Going shopping on the weekend, I saw discount sales like I have not seen before. People walk in, take a look around and then walk out again, where only months or years earlier would have grabbed arm fulls of "bargains". People are not expecting their homes to gain value any more and they are quietly concerned about the future of the economy, interest rates, taxes, etc, so they have pulled back their spending. Borders has closed, Angus and Robertson closing stores and now Colorado as well. My guess is this is simply the beginning. This leads to higher unemployment and further declines in spending and further declines in house prices. Turns out it will happen here in Australia just like it happened everywhere else. Tough times ahead. Cash is king.
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