> -----Original Message-----
> From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]
> Sent: Friday, 11 February 2000 09:33
> To: [EMAIL PROTECTED]
> Cc: [EMAIL PROTECTED]; 'Jamie Honan'
> Subject: Re: [SLUG] IPO's
>
>
> Craig Southeren wrote:
>
> >
> > > - are the sums involved in IPO's healthy for the ecomnomy
> >
> > In general, yes. Process that keeps money flowing through
> the economy are
> > usually good. Anything that causes money to be stagnant, is
> usually bad.
> > One of the reasons why Australia's economy is so dull is
> that most of
> > people's capital is tied up in their house mortagages
> because the tax
> > regime makes is sensible to do so. Other economies such as
> the the US
> > and Japan where house ownership is not so widespread have much more
> > vibrant economies
>
> So the fact that maybe 5% of the money in Australia is invested in
> housing (because we have such poor old age pensions), stops the other
> 95% from flowing.
It may be 5% of the money overall, but it is a significant portion of most
individuals wealth.
A dynamic economy requires liquidity in order to keep money flowing around.
Chaining people to a mortgage for 30 years doesn't help stimulate the
economy - it just makes the banks addicted to a reliable cash flow so they
can lend money to enslave other poor souls. This is why the whole country
hangs on the policy of the Reserve Bank - the blunt instrument of changing
the wholesale lending rate in order to change the mortgage rate in order to
affect consumer spending is ridiculous, and is not done in any other country
(to my knowledge). For example, fixed rate mortages are standard in the US,
so consumer behaviour is dictated by other factors which directly effect
spending habits. Taxation, credit card rates, etc etc.
But the US is a bad example - it has such a large economy that recycles
capital so quickly that even small influences have a large effect very
quickly. Australia is the reverse - very small economy, very slow moving,
and hence requires large influences to get it to change.
> No wonder the government wants to prevent academics collecting figures
> on the distribution of wealth in this country. That allows journalists
> to write crap blaming people buying their own home for our economic
> misfortunes.
Huh? I see no scarcity of academics able to get a masters by matching their
measurements of wealth distribution to just about any
socio-economic-political theory available.
> We have a high level of home ownership in this country because Bob
> Menzies started it as bulwark against communism. It is in Hansard!.
I have no doubt this is true. I was talking about effects, not causes.
> Doesanyone know how many transnational companies have a bigger budget
> than Australia?
Not off the top of my head. But I would not be suprised to find that there
are quite a few.
In global terms, Australia is tiny. There are more people in the Los Angeles
basin than in all of Australia.
Regards,
Craig Southeren
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