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RE: John Templeton, Market Cycles and The Value of STEEM
Thanks for posting. I've been thinking for a few years that the real estate market in Aus should crash soon, but it still doesn't seem to be slowing. Cheap credit is still reasonably plentiful, interest rates are low... the dream can't last forever though.
With Steemit, the price of Steem rose to the high of $4 and everyone was excited, and then naturally drifted back down. I thought it would do something like that, because naturally that's what happens after spikes, but many people seemed to be a little unprepared, and a few people were wondering if it spelt the end. Now it seems to be stabilising and I guess it's in a new value phase. Still early days though, so who knows.
As far as Aussie real estate goes, it's quite an amazing phenomenon. It's a combination of the mining boom, China's money creation flowing in, growth in immigration, concentration of jobs around five key capital cities, urban planning restrictions, generous tax concessions for investors, and above all, the availability of cheap credit. It really has been the perfect storm.
The market should have corrected in 2008 when credit contracted, but only flattened out because of government stimulus and the RBA slashing interest rates. The RBA cash rate is 1.5% (lowest in history) and still could go lower, so unless/until there's another credit crisis overseas, who knows how high property prices here can go. I do believe regulators will step in and try to direct credit away from Sydney and Melbourne housing. There are beginning to be some class warfare grumblings.
Regarding STEEM, I agree. There was a mini boom and bust but hopefully on the way to a true growth phase. Who knows, perhaps without central bank intervention, we might see a sustainable currency established. Time will tell.
Appreciate your comment.
Right, I saw a bit of nonsense stirring up on my Facebook feed about negative gearing. Everyone talks about negative gearing, but nobody talks about central banking... it's quite bizarre. I don't know how I've been so lucky to stumble into this information, watching Zeitgeist or whatever, while so many people are just willing to believe what Walid on the TV tells them
It would blow your mind the conversations I have with people who are convinced that the Aussie real estate market is untouchable. It will be a rude awakening some day.
You would think that after watching the American real estate market crash, people would believe it's not only possible, but also probable.