Australia, After America || Peter Zeihan

The Australians are one of the few countries that will stay under the United States' wing as the Order collapses, but they have a few things to figure out first.
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#australia #globalization #usa

[@bentaxelrod]

We used to make almost everything in Australia, including high end electronics before during and after WW2. We were the third country to launch an Australian built satellite from our territory. Since the early 80’s that has all declined. We now rely on mining, tourism, education and agriculture. As a manufacturer who exports world wide, I am very frustrated with our 2 major political parties. I’m sick of the excuse that we can’t compete with China. We don’t have to! We can do things where they have to try to compete with us.

[@bryanx590]

You forgot cars, you don`t make cars anymore.

[@VanWonderer]

with sky high energy costs and organised criminals called unions good luck competing with anyone, at least we are very religious, we pray on climate change and property market

[@nicholassmith7984]

@@bryanx590 We did that to ourselves. We wouldn't compete with Asia on price, and wouldn't compete with Europe on quality. Not to mention making ourselves hostage to the carmakers that were here.

[@tonybloomfield5635]

@@bryanx590 Best thing we ever did. We should do what we are good at and not what we are not.

[@Lupi33z]

because of Climate Change policies we deindustrialised. It was a deliberate act to make our country non competitive.

[@michaeldavis3819]

As an American, here's hoping our Aussie brothers can move forward with manufacturing and their housing markets. And I hope the US with all our problems will still continue to be as good a friend to Australia as Australia has been to us.

[@donna6592]

🇦🇺 🇺🇸

[@mattmillane9956]

Don’t worry mate - it’s all good; just Peter talking shit with next to no knowledge

[@shaneashby5890]

Australia is with you mate 👍

[@TBiz81]

I’m Australian, we will always support America, we support our benefactor that’s what we do. It used to be the UK until they passed the torch to The US. But don’t underestimate us, “creativity & capability” cuts both ways.

[@WackadoodleMalarkey]

Happiness is a tight- knit family in another state 💖

[@willwillgill7076]

In terms of a sub-prime housing crisis, there are fundamental differences between mortgages and taxation in the USA and those in OZ. (1) Australian banks do not issue and never have issued "no recourse" mortgages/loans. You cannot walk away from a mortgage as per "jingle keys" in the US induced GFC. Every Aussie homeowner knows that they are legally liable for their mortgage debt even if the house burns down and they did not have insurance. This focuses the mind to keep up with repayments. (2) fixed rates in OZ are typically for 1, 2 or 3 years only. Very infrequently a 5-year fixed rate is available, but not often. This means that mortgage repayments rise and fall for most Australians with the bank rate. This means loan approvals are more difficult.Down Under, and disciplines borrowers far more than their American cousins. About 70% of mortgages at any one time are not fixed, but fully "variable." (3) Australians cannot deduct their mortgage interest off their personal income taxes. Repeat: Aussies cannot deduct their mortgage interest off their personal income taxes -- IF they reside in their own home. They can do so only if the property is rented out to someone else (and then paying taxes on the rental income), but not their own primary home. This also makes for a far more disciplined group of borrowers. (4) There were 13 rate rises in the calendar year 2023 and the number of distressed borrowers consequently is reported as less than 1% nationally. In fact, the average home-owner is more than a year ahead in their mortgage repayments. (6) There has been a housing shortage in Australia for decades. DECADES. The immigration level is one of the highest in the Western world. This year we had a net 650,000 migrants after nearly two years of our borders being closed due to Wuhan/Covid-19. This influx of new arrivals, both temporary visa-holders and permanent migrants, exceeds available housing stock by at least 150,000 - 200,000 homes at any time. This fact is the reason that all forecasts by international economists and pundits about the imminent collapse of the Aussie husing m< market, or housing bubble, have proven wrong, wrong, wrong. Harry Dent has forecast at least three Aussie housing bubbles. British forecasters, ditto,. As far as I can see, after owning property in OZ for over thirty years, there could be a downturn, but not a bubble/collapse, if the economy goes into deep recession and people cannot afford to borrow at all. It should be remembered that Australia did not have a recession in 2008/9, and has not had one even technically since 1992. Cheers, William

[@timbo5053]

Was thinking the same. Makes me wonder about how accurate Peter is on other issues.

[@Bucket183]

Great explanation

[@Dieter-ms6on]

Yes, this is true William, and a significant (rare) oversight by Peter. A very different situation which makes his prediction of a long depression due to this reason very unlikely.

[@LB-wi6wu]

Well said totally agree.

[@s-c..]

I’m pretty economics-dumb, but I at least knew that our mortgage systems are very different from the US’s & that’s why we didn’t have a plethora of foreclosed properties getting snapped up for a song in the GFC like they did over there.

[@warwickmorris6109]

Thanks Peter. An Aussie here too. A few corrections: we do convert bauxite to Aluminum on a large scale, we do refine quite a bit of copper, zinc, lead and nickel. We now produce downstream Lithium products (but not batteries). We do some rare earth production steps but unbelievably can't approve making final product because of thorium radiation concerns. We do make steel and one of our main steel manufacturers is also one of the bigger US producers as well. We do produce some local downstream natural gas products such as fertilizer and explosives and some plastics. We have nearly lost all our oil refining capabilities because our governments are very short sighted. We are not big manufacturers because our pay rates are high and most our governments are big on government and small on private enterprise and in fact they feel comfortable with China which is pretty stupid but there you are. We are pretty good at complex construction and our best companies work nearly everywhere in the world. I could go on. A lot wrong but a lot right too. Oh, and we are intent on supplying India with whatever it needs to grow. We are also one of the most ethnically mixed countries in the world with large

[@BenState]

No we convert bauxite to alumina, and very little aluminum. Very little of that is done anymore in our country, and didn't our last refinery shut down?

[@RockDoctor]

@@BenState4 smelters producing aluminium metal, 1.5Mt produced in 2022. 6th largest global producer.

[@matiusclicarelli700]

Bro sit down. It's OK you've been hurt. But that's OK, the truth hurts.

[@chrisstewart8259]

@@BenState Here in Australia, it's aluminium NOT aluminum. See, this is the problem! Yanks insist on exporting their language, movies, stupid imperial measurement systems, news media, social media, political baggage, spyware (think Pine Gap here) and their imprimatur arrogance about anything "Non Murkan", all without any grace or appreciation of the recipient country. Tired of it. Tired of the noisy, obnoxious drunk uncle at the barbecue.

[@BenState]

@@chrisstewart8259 It was a typo you werido, but if you want to get technical the original and correct name is alumine - as per Davy, the person who originally named the metal, who incidently used BOTH current versions of the form. So get your head out of your arse ya muupet.

[@tonywilson4713]

*AUSTRALIAN HERE:* I wrote to Peter at the start of this series and spoke about some of this. I hope he pins this comment sorry if its longish - On the Chinese - Peter is 100% right. We are way too heavily invested in China buy our raw materials. I have worked in our mining industry for most of the last 20 years and when the Chinese hit the wall we will be screwed and their construction industry has been so out of control that it won't be able to do anything but collapse and with that the demand for our raw materials will vanish. We got a taste of it when the GFC hit and as Peter said we didn't learn from that lesson. Luckily we have the rise of India that will compensate for the loss of China. The question is what happens as China falls and India rises as in how much overlap there'll be. - On the value adding thing and manufacturing - Peter is 50% right. Before working in mining i worked in manufacturing for over a decade BEFORE OUR ECONOMISTS killed it. We used to make steel and smelt alumina and make cars. We do make flour but only for our market which isn't unusual because transporting flour is a hassle compared to grain. We do make sugar locally and export tons of it. We also export staggering amounts of dairy to Japan and Korea. What killed our manufacturing was our version of *NEOLIBERAL ECONOMICS.* America called it Reaganomics, the Brits called it Thatcherism and we called it Economic Rationalism. We had treasurers on both sides of politics who loved it (Paul Keating & Kevin Costello). They privatised everything they could promising _"Competition would provide better services and lower prices"_ and it DIDN'T. They have spun everything that's gone wrong into _"Its awesome because investors won."_ and yes its been awesome for INVESTORS but the other 90% of us have been smashed, screwed and thrown under the bus. - On the subprime comparison Peter is again 50% right. None of our home loans are guaranteed, *its the banks who are guaranteed.* Its another part of the Economic Rationalism -> Protect the investors and make everyone else pay for it. The effect is that our banks have been way too open handed at supplying money for home loans. that's driven prices to idiotic levels and when that bubble bursts it will be volcanic and we might not recover. - On the American links the main reason America will protect us before protecting a lot of other places, IS NOT just because we've been joined every fight America has invited us too. Its because of American has 2 of its most important bases in the world in Australia. There's Pine Gap and Naval Communication Station Harold E. Holt (also known as Northwest Cape). Both have Wikipedia pages but neither really portrays how significant they are. FIRST - Because of where Pine gap is, its the ground station for the main US Security/Military satellites in geostationary orbit that look down on Russia, China and the Middle East. as well as being the ground station for any other satellites as they fly over Russia, China and the Middle East. Since 2000 the number of satellite antennas has basically doubled on the site. The YT channel RealLifeLore did a great video on this. SECOND - there's NSC Holt, which is much smaller than Pine Gap but no less significant. Its where the antennas that let the American Navy communicate with all of its submarines in the Indian Ocean are located. There's rumours that both these bases are nuclear powered, but there's NOTHING to substantiate those claims. So please don't bother me with that crap. The ACTUAL SIGNIFICANCE is these 2 bases in a "global exchange" is they are ZERO STRIKE targets. In other words they come BEFORE FIRST STRIKE TARGETS. Many Australians are under the delusion that if we have US bases with B52s we'll be a FIRST STRIKE target. So what - the fact is we have not 1 but 2 far higher value targets than 99.999% of Australians realise and have had them since the 1960s. If Russia, the Chinese or a few others really want to do something huge they have to take out BOTH Pine Gap and NSC Holt *BEFORE THEY DO ANYTHING ELSE.* That's because Pine Gap is the optic nerve for the "Eyes in the Skye" and NCS Holt is the auditory nerve for the "Ears in the Sea." Basically they are the 2 most important US bases for communications NOT IN AMERICAN territory. Hope that explains some stuff. Hope 2024 is better for everyone.

[@sandkipper1]

Kevin Costello? I think you mean Peter Costello.

[@parrmik]

I remember the days when ar 4.30 pm hordes of factory workers decamped from all directions.Now its all distribution centres for overseas made goods.

[@89mfp]

Spot on.... particularly the 50% comments

[@DurzoBlunts]

Y'all's milk powder is a big export for poorer nations too as I recall. China will stop buying eventually but I bet others will step up to buy it.

[@brendanalfo411]

Don't forget the emerging rare earth's market for advanced tech such as fighter planes.

[@Talwyn22]

When the first planes crashed into the towers on 9/11, Prime Minister John Howard immediately invoked the ANZUS clause that states if a member of the alliance is attacked, the others would take up arms in defense of their ally. John Howard was welcomed by Congress in the special joint session and applauded for that. Australia was the first to step up and back the US. Its not been forgotten.

[@jamesmorrow1646]

No. Australians haven’t forgotten Howard got us involved in the criminal invasion of Iraq.

[@fransdebruijn6763]

@@jamesmorrow1646 "Well, when the president does it, that means that it is not illegal"

[@Thisisnolongerajoke]

Weapons of mass destruction.?

[@joythought]

Howard was the nastiest filth we've had as PM in my lifetime. I was born just after Menzies left office. But Howard never said the WMD lie was true. He was clear that this was the reason given by our allies and so Australia would support any military adventure they started even without UN support.

[@jf7243]

And then our current excuse for a PM denies sending a warship to the Red Sea. Alliances depend on how left your politics is.

[@TheDukeofDuchess]

Wife of an Aussie veteran who was in the middle east, Afghanistan etc. and I never really understood why we needed to be there (I was obviously very worried) but my husband tells me the bond between the US and Australia defence wise is absolutely unbreakable and that if the US is somewhere then so are we...I guess most civies will never get it but he assures me that our ties together are deep, so hearing you say the US won't drop us makes me understand what he says even more!

[@Jason-yd6mn]

australia fortunately have never forgotten it was the USA that saved us during WW2 from Japan - i for one appreciate that fact !

[@chippyjohn1]

It's just because the USA owns most of our country. Nothing about loyalty or protection of people. Our government was bought so they obey their masters. That is the truth. Killing innocent people in the middle east was not for Australia.

[@noelwebb6843]

If Australia & the United States have such a strong defence alliance, why did the States refuse to support us in East Timor?

[@kerriemccoy1647]

​@@Jason-yd6mnI take your comment as an insult to every allied country that was involved in WW2, both WW America profit from it & came late in both wars. Bit of arrogance too to claim that America was the reason why we won in WW2, don't forget the war ended before America dropped the atomic bombs on Japan.

[@kerriemccoy1647]

​@@noelwebb6843No oil, if oil or anything else America wants they either start or get involved in wars why do think they supporting Israel, it's their oil they want.

[@sandybottom6623]

I would venture to say that Australia does not have a sub prime problem. Australia has always been rather hard and strict.

[@jmsblk1]

Its actually very hard to get a house loan in Australia, you usually need 5 to 20 percent cash upfront, a full time job and a unblemished credit history, we have no sub prime mortgages.

[@ConstructionHoney]

We have the supply bottleneck

[@davidkingsford1010]

Thanks Peter for doing an Australian segment As an Aussie, I agree with your assessment. We'll all need to work hard together. 👍

[@mattmillane9956]

What do you agree on? His analysis is complete shit.

[@moeuramo]

Well said 🏆

[@RayofSunshine5519]

Together with China? Because that’s who Australia pays allegiance.

[@grant1905]

We make our own flour though, and we are building lithium battery technology here with govt support. So he's not right on a few things.

[@capmarketer5038]

I think he's missing the run-up in asset values and how immigration is gonna exacerbate that rise. Rising asset values hide many sins in debt. Any hiccup in the Chinese/Indian economy or political environments exacerbates that demand. Also, Australia should seize a lead role in Asia-US tensions and play both sides, like joining BRICS, healthy for the AU$

[@jsmorritt]

As an Australian, I agree 100% House $$$ are nuts for years I work in the mining industry and have said for years we need to do more than just dig rocks out of the ground. And 100% Aus is a great friend to the USA

[@brendanedwards2277]

We do, mining is only 10% of our export economy. Oh and housing will be nuts for many years to come.

[@wattlebough]

@@brendanedwards2277 If borrowing costs go up for any reason from where they are now foreclosures on home loans will skyrocket. Working class home owners are at their limit right now. If it’s not interest rates that tip them over the edge they are vulnerable to inflation in the cost of living. They have no disposable income to speak of. That’s the current situation. To me people in this boat are extremely vulnerable to further global economic shocks.

[@user-ek9go3kf2w]

@@brendanedwards2277 Sure you have some investments in properties, no?

[@carmenmccauley585]

​@@brendanedwards2277you're making his point for him. But housing is linked to immigration. Get that stopped and work on your housing.

[@pugilist102]

When your subprime hits, will Australia allow us Americans to buy homes there on the cheap?

[@johnryan1386]

Honestly Peter as an Aussie I’d love to see you do a proper deep dive into the failures of this country. I’m turning 40 this year and don’t recognise this country anymore compared to when I was a kid

[@chippyjohn1]

Because it is mostly US owned now. They have brought their problems here.

[@nicholassmith7984]

That could be that you're paying attention to things you never did when you were younger. I think Australia squeaks-by on reputation far more than we would like to admit. We're always thought-of as so laid-back, when really we are a very uptight society. We take pride in our accomplishments, but never really push for excellence in anything that isn't sport; more often than not, just not being the worst is good enough for us. Personally, I wish we would try to take the initiative for once and try to excel in various areas. There's no reason why we couldn't be a technological powerhouse, or a research hub, or at the forefront of any discipline we set ourselves too. We need to do more than just dig stuff up for China or try to hoard real estate.

[@brandmotivo]

Good comment. There's so much emphasis on real estate here that it takes away any incentive for innovation. No-one seems to be designing for the future at all like in other countries... a lot of those other countries innovating don't have the real estate craze like we do here either. Negative Gearing is one of the things that has ruined this country in focusing on real estate and nothing else. What you think? @@nicholassmith7984

[@evanburrows1697]

@@nicholassmith7984 yep agreed , unbelievably uptight and getting worse - free speech restrictions, "sin taxes", etc. Although this crap is spreading everywhere too, alas. And yet the world thinks we're hard-drinking Crocodile Dundees, etc.

[@ausairman]

What are the main factors that led to your "don't recognise this country anymore" comment?

[@anthonydwyer4]

Also as an ozzi i was offended by the “Swallow whatever the chinese put in your mouth” comment 😂 😂

[@linmal2242]

Yes, that was a bit offensive considering that we have been ex;porting ores n metals to Japan, S Korea and others for decades !

[@shakespeare_hall4788]

Yeah Aussie here WA.. I found that comment a tad ignorant... The problem is everyone who has a bad opinion of China has never been there or done business with them, personally I have lived and worked in China and my wife is Chinese and I have to tell you there is nobody does busniss better than them and nobody has more motorvation and work ethic, and once you can speak their language and understand how they think you find a open minded work partner! I would put my faith in China before America any day! America is a has been and currently we are witnessing the Fall of an Empire.... Especially after the disaster of the Democrats treasonistic behaviour... Deplorable!

[@RyanQuinn0397]

Yellow man bad!

[@gordonbossley4185]

Get over it. Take your shirt off and have a look at the tag. Chances are it was made in China. If we stopped importing from China, we'd almost collapse.

[@smileyfacefrown2723]

Especially when you consider the economic damage America has done to Australia over the years compared to the Chinese.

[@tonybloomfield5635]

The reason Australia sells such a massive amount of raw materials to China is because China produces so much of the consumer goods for the entire world, including Australia's good friends in the US. If the rest of the world did not outsource so much of their manufacturing to China, and indeed manufactured at home, Australia's spread of commodity exports would be directed to where the manufacturing actually occurred and be much more diverse.

[@smittyk7810]

Totally agree with your assessment. The whole world made China the worlds manufacturing hub and now their totalitarian government is powerful enough to threaten us all with another Pacific naval war. The opportunities given to China should have been shared with a range of countries for fairness and not concentrating economic power but the billionaires were too focused on the 1.4 billion cheap workers and customers China had. Corporate greed caused this and the wests desire for cheap products while disregarding the working conditions and human rights violations. Greed has been the route of present and future evils of the CCP.

[@bigbubba4314]

@@smittyk7810greed has also been the reason for all innovation in the first place. Capitalism absolutely has its downsides, but it is also the best system for elimination of poverty and the advancement of the human condition yet devised.

[@smittyk7810]

Yes you are right and although i was a socialist in my youth I have to agree with your reasons and have appreciated capitalism more. @@bigbubba4314

[@MasterMalrubius]

@@smittyk7810Except that those "greedy corporate" types are providing the very merchandise at the very price that consumes will purchase. So those corporations which do not move their manufacturing to cheaper locations end up going out of business or being bought up by those who do as people have decided to purchase the cheapest product so they can purchase more. Instead of trying to blame a tiny percentage of the population why not look at the facts that people go to WalMart and dollar stores for the same reason. it's cheap and they don't care if it was manufactured in China. And these are not just poor people but a steady stream of middle to upper middle class consumers heading there every day.

[@smittyk7810]

The problem was that capitalism was aloud to do what it likes for too long and it has created the China and the CCP problem we are now having to deal with. Concentrating so much economic power with a totalitarian communist government was always doomed to fail. Unregulated greed has caused economic crisis, recessions, and now WW3 in the Pacific.@@bigbubba4314

[@grendalsuncle4040]

Part of the problem in Australia is that since the 1980s ( if not before) instead of expanding our manufacturing capacity it has been sold off to other countries (including USA) and moved offshore

[@AUniqueHandleName444]

On a net basis, the US hasn't taken any manufacturing from other countries in a long, long time. Well, apart from China in perhaps the last 2-3 years.

[@Art-is-craft]

That has zee outcome in Australian economic infrastructure. And is more of a demonstration of how regulations frame works make it very difficult for developing the Australian market. Australia right now is in the grip of welfare state frenzy.

[@davidabulafia7145]

From the mid 70s we have been sell off industry.

[@chippyjohn1]

Yes, the US owns most of the mines and banks in Australia. That is the reason for the problems he mentions.

[@darylcheshire1618]

Australian businesses are so risk adverse. Usually anything that is started is sold off before it gets anywhere. Probably due to our small population, in US they can sell a product to the local market and it becomes viable, in Oz there are not enough customers and when they go to US to expand the market, if it’s any good it will be sold off.

[@georgejolkesky3104]

I would love if you made a video on the US' outstanding debt

[@forestcottage7321]

I was born in Australia and have been around a while. All I can say is we are blindly walking into a nightmare! We have a corrupt government, no foresight, have sold our utilities to foreign countries, have allowed way too much land, both productive agricultural and private property to be sold to the highest bidder, who doesn't reside here. And as you have said, we dig our earth and ship it out of here, with no real manufacturing. We have ridiculously insane immigration, without proper planning, the infrastructure cannot support these numbers! There are no houses, not enough hospitals, and people are dying as the ambulance system in Victoria is broken like many other things. The inequity continues and the gap between the haves and have nots continues to widen. Its beyond disgusting that young people feel hopeless and will never own their own homes, with or without a degree! And renting, well there wont be any of those either! We are just too backward!

[@Whos-That-Guy]

This is a bit of an overstatement of the truth. Agree that all these things you mention have gotten worse and not better. But it's still the country place to live. Could be and should be better though.

[@philsurtees]

You're talking out of your ass.

[@iandaniel2153]

Can only add to the dozy lot in the comments section needs to wake up .... when state side goes down and it will, so goes Oz because for decades as a nation we have been unable to take a neutral stand on international affairs like the kiwis and continue as a warrior culture which protects the innocent which encouraged us to be peacemakers of the world. Instead we have suckered up to the yanks in their wars of terror perp'd on those who won't bow down to the zionist globalists, their enablers and their disgusting trope which control the whole ball and wax stateside. We are on the wrong side of history with the old zioangloamerican empire. The right side is with BRICS+ Most people don't even know they are indigenous just by being born in Oz ... that's how stupid aussie aussie hoi hoi hoi's are who would rather play cowboys and indians or wild colonial boys with the yanks than get to know fellow Asians with their millenia old cutures which includes our aboriginal bush custodians of this country.

[@rossbaker9721]

Thanks for doing this one Peter. As an Aussie it’s so important to hear your thoughts.

[@pohdiquesti]

Not sure, Aussies are too reliant on Chinese money, there was a trade ban and Aussies farmers really suffered

[@omduttdixit6285]

Just an advice don't hear this morons thoughts . He will spew only most baised US view nothing else . But i think Western nation do not have any other options or will either

[@Mr_Squiggle]

Wrong on sub prime, that was America. US Sub Prime caused credit squeeze, therefore no credit as no trust. Aust. Gov at that time guaranteed loans due to US screw up and keep cash loans banks and business moving. Bigger issue is the immigration driven false housing market economy. It falls, big trouble as it now underpins economy by both dodgy political parties. That's one reason why we don't have second tier processing. Daft Funk Music: dig it, drive it, sell it, ship it.........

[@TenOrbital]

@@pohdiquesti- thanks Capn Obvious, thats what Peter said.

[@BillWoodillustrator]

Oh ffs.

[@asmodeus0454]

He's right. As Australians we ought to have begun properly industrializing decades ago and what little industrial and manufacuring capacity we did build and develop before, during, and after the Second World War we allowed to run down and dwindle to nothing from about the mid-1970's onwards. And we are going to pay for this lack of perception and foresight in a big, big way. It was even said back in the 1960's when I was a kid that we needed to be much more industrially developed than we were and our manufacturing base much larger than it was.

[@jezza4193]

Not to mention little Johnny's sell off of nearly all public assets.

[@roakes1956]

Australia shut down much of its industrial capacity in the 1980's for the very good reason that we could not match the efficiency of off shore producers. Before that those industries only survived with the aid of subsidies and tariff protection. There has been zero appetite, in government or in the broad community to pay the cost of such industrialisation for the last 40 years. Such speculations are moot...

[@somethingelse9535]

@@roakes1956 Well, just introduce high tariffs and watch them open factories left and right.. (white goods is a good start). It was the removal of tariffs in the 80's that contributed to the wealth of Australians in the first place. I remember everything costing double in Australia compared to other countries. That economic model called "comparative advantage" means we do the extraction, they do the manufacturing, because "they" being countries more populous with low cost labour are far more efficient at it. This makes Tony Abbott's decision to cancel car imports tariffs and therefore local car industry support even more annoying. It was the last piece of large scale manufacturing we had.

[@JimBob-vb8oz]

@@jezza4193started under Whitlam and has continued ever since

[@sexyjesus3039]

Libs will sell off any infrastructure

[@ozmatterhorn2147]

I'm seeing so many comments saying "As an Aussie" these days and I want to say as an Aussie we should have the acronym AAA to make it a lot faster to say AS AN AUSSIE.

[@stevoschannel]

Housing prices in Australia are beyond bonkers and successive governments have only compounded the housing crisis. The gov will do just about anything to inflate house prices until they can’t anymore. The question I have Peter is, when do you see the housing bubble bursting in Australia? And how long before Australia feels the Chinese decline? Love your work by the way! Cheers!

[@mrjoelsmith]

It won't be while there is still an enormous housing shortage!

[@danieljong8442]

It won't be long before we feel China's decline, it feels like they're going to crack at any moment. They're great at making things look good from afar, but far from good

[@ALF782]

If you don't like the prices there are plenty of affordable houses outside of Sydney and Melbourne.

[@reggrunow1460]

He demonstrated in this video that he has sweet FA knowledge of the Australian property market. Every point he made was incorrect. Why would you seek a forecast from a bloke dealing in a knowledge vacuum?

[@robertjohnston5915]

Yep, he has no understanding of the difference between American and Australian mortgage requirements.

[@isaac827]

As an Australian it is a little scary how correct an American can be about our future, its a shame our governments dont seem to see it.

[@concernedaussie1330]

Oh don’t worry they know exactly what they have been doing ! They have feathered their own nests & it’s the average Australian that bought the house & great Australian dream that will pay the price. I pray for the housing market crash , foolish people need to learn a hard learned lesson. I just hope I have enough hard assets & nothing in the banks to swoop me up a little place in the country & own it outright.

[@ivancho5854]

​@@concernedaussie1330 Yea, bank confiscations could be real. Australia will crash VERY hard, probably more than Canada.

[@Puppydoug]

You sound envious of those who've done better than yourself. Not a good look.@@concernedaussie1330

[@dekumutant]

Our government right now for the first time in decades is greatly expanding our manufacturing as he mentioned. Key point was this should have been done decades ago. So our current gov does actually see it

[@concernedaussie1330]

@@dekumutant to bloody late . & our labor costs are to high & everything is overpriced. We need a major crash , we need to feel some pain . This lazy assed welfare state needs to end & wages need to go down by necessity . The current government cannot bring us out of this imo. I guess we’ll just have to see .

[@sueschoers4974]

As an Australian, fully agree with this assessment.

[@chrisc2671]

As an Aussie I’ve been hoping to see one about Australia. I’d like to say a few things. Regarding the “not moving up the value added chain”. We have extremely low cost raw commodity’s ie, cheap to get out of the ground and close to Asia (comapered to South America and Africa). Basically we make good margins out of just dominating that end of the market because we aren’t competing with businesses in customers market. For instance, we sell iron ore to Japan and China and they subsidise their steel industry to make steel out of it. Everyone wins except for their tax payers. If we decided make more steel in Australia we’d have to divert resources into a highly subsidised industry. It’s not really possible to compete with Chinese or Japanese steel producers in China and Japan. Unless ofcorse we joined in on the stupid game and we distorted our market too and preferentially gave our steel makers cheap iron ore and coking coal and sold it to the Chinese and Japanese for a higher price to hurt their steel producers. But then what? Peter Zihon might be happy but Brazil would get a boost to their iron ore exports, China would increase the subsidies to its steel industry, we’d have to spend tax payers money on increasing the subsidies to our steel industry etc. Australia does have a steel industry, and if no one subsidises their own industry it would be extremely competitive, but we are better off just clogging off, in super high volumes at low cost all the stuff we dig out of the ground. Lastly the housing market is not at any risk of collapse, and we have nothing like a sub prime crisis brewing. However, if China collapses then Australia absolutely will have a huge recession/ depression and house prices will fall. They might even halve in value. But that’s only because China is so important. I get that if you believe China will collapse then what’s the difference. But the GFC was an endogenous shock. It was an own goal. Australia has nothing like that. I can’t stress it enough. Our government during the GFC explicitly garenteed all bank deposits knowing that it wouldn’t be needed, just to calm the market. The Commonwealth Bank of Australia (CBA) briefly became the 10th biggest bank in the word by market cap during the GFC because it was seen as being so safe. Australia also has very low government debt compared to most advanced economies. Right now Australian mortgage repayments are through the roof. If there was a exogenous shock that threatened our housing market the Reserve bank can slash interest rates which will put huge amounts of money in the pockets of the vast majority of mortgage holders each month as the vast majority of home loans in Australia are on variable rate mortgages.

[@mattycoze]

Hmmm I find two things a bit hard to swallow - 1) since china’s sanctions on Australian produce - much of the primary producers of food have pivoted away from depending on china and diversified with europe and other parts of Asia… 2) I don’t think Australia has an issue with the debt structure at all… Estimates at around the time of the global financial crises put Australia at having somewhere around 30-40% of non-government bond markets… Today it’s 2%. Current CDO’s underpin corporate debts not subprime mortgages and the regulations have been tightened significantly following a 2018-2019 Australian Royal Commission into lending standards. APRA also include serviceability buffers in managing systemic risk in the housing market.

[@mattycoze]

* similarly coal and gas have pivoted away from china and sought to export more to india, japan, and SE asia… as for metals like iron and bauxite the move away from china is much harder as there really isn’t much more of a market for them. As for lithium refineries and battery plant is being developed.

[@philliptrevenen7398]

Thanks Peter, sitting here in country Western Australia helplessly watching all the eggs of the Australian economy going into the one basket. It's been a topic of conversation for decades and we still haven't taken it seriously .Hopefully your analyses of our situation can have a positive effect in change so we can move ahead and build a solid foundation. Thankyou

[@sitrucking9602]

Yes we are like the 🐦 poo island 🏝 "Nauru" selling the magic but unseen land , Selling the soul of our country for $$$, I sometimes get on Google Earth and are amazed at the mess that has been made.

[@petersinclair3997]

Decision makers probably don’t even know who Peter is, even, if he provides good comments.

[@markfrombriz]

One day we will dig 😊the last tonne of raw product out of the ground, what does our brittle economy do then unless we start developing other capabilities and industry now

[@scroogemcphuck]

As an Australian it's unbelievably frustrating as to how laddy da everyone is with EVERYTHING political. We're just sleep walking into an economic crisis when we absolutely don't need to 😂. Oh well, she'll be right.

[@Jcremo]

I have never in my life read laddy da in a sentence but I 100% understand what it means. Haha. I’d spell it “lah di dah.’

[@scroogemcphuck]

@@Jcremo I'm glad I could provide you with a unique reading experience

[@lindsylindsy]

Couldn’t agree more. Was really looking forward to some good conversation over Xmas lunch. But everyone was talking about what was on netflix 😴

[@chrispekel5709]

@@Jcremo Wrong. It's spelt 'Lar-dee-dar'...didn't you know? :P

[@kurt1391]

Well, if there is a crisis and civil unrest, what are odds the Australian government would crack down and turn authoritarian?

[@capmarketer5038]

A big missed opportunity for Australia was not nationalizing the commodity sector like Norway did with their reserves. Hiving off valuable commodity reserves into a national trust protects the rest of the economy/prices from being so directly affected by that strong sector. There was a vote to do so, but Gina Rinehart shot it down, now Australia has a bad case of Dutchmen's disease that its choking on. Anyone know when that was?

[@iandaniel2153]

So you really believe the yanks would let this through. For God's sake look how they ripped the guts out of Telstra and anything else that had public ownership. Same happened in Germany regards public ownership.

[@grouchogroucho7743]

Australia had a large processing capacity post WW2 with many manufacturing industries that produced everything from motor vehicles to ships to electrical products like TVs, radios, washing machines, as well as clothing, shoes - you name it. But like the USA, these industries were gradually reduced as companies moved offshore to where production costs were cheaper (ie. China). Hopefully it can ramp up quickly when everything hits the fan. They already had a taste of "no China" during COVID and as a result a number of companies have moved production back home or to other more reliable sources.

[@andrewwashere9151]

It's called "selective re-shoring", we cannot and shouldn't try and make everything, the economies of scale will never allow it without high levels of protection, this is what got us into trouble in the late 70's once the tarriffs came off we had a slack inefficient and technologically outdated manufacturing sector.

[@grouchogroucho7743]

I agree. But it would be useful to value-ad some of the commodities we already produce as well as re-introduce some industries that could be helpful to us but with a highly automated setup.

[@Xlerv8]

Don't forget about every single countries governments signing their industries away in the 70s signing so called free trade agreements, Lima Agreements, accord of Rome, etc. The governments all sold their populations prosperity, economic, and social wealth away!

[@linp3632]

No manufacturing here. I'm live here. They keep closing things down. Like Ford and Holden/Chevy. Goto a local shopping centre, which all looks the same. Most if not all of the goods are made in Asia. We simply cannot afford making anything due to high wage and taxation. It's a double edged sword.

[@benstone5036]

As a country we’ve kicked the van down the road for decades when I comes to our housing market and value adding to our resources. Subsequent governments have taken the easy options with no sense for the future. When an opposition Govt has put forward productive changes the Murdoch press and the moron voters went against it….and here we are. 🙄

[@13thbiosphere]

The reality is it's gone so far that if migration stops the Australian economy is doomed the Australian economy is all based on real estate, We Can't Stop migration even if we wanted to otherwise would we be a hell of a lot poorer but at some stage there's going to be a correction I hope we can just push the can down the road for another 10 years

[@brendanedwards2277]

No, it's the way the market works, if you make something here that's more expensive than something made overseas, people will buy the cheaper product. It's cheaper to dig it out of the ground and buy it back as a finished product. Don't worry, if we need to value add we have the expertise to do it quickly.

[@fickle1207]

That's the key, the default option of the ruling party will always be kicking the can. The politics nowadays have become very unproductive. Politicians spend much more time in arguing just to win than constructive discussions. Debating has overtaken, science, maths, economics as the focus of the education system, reflecting a society which value "communication skills" much more than the content people communicate.

[@ivancho5854]

​@@fickle1207Very well said. It's like this all over the West. Lots of politicians and not a single statesman.

[@nigelrhodes4330]

@@brendanedwards2277 This is not correct, unions have held back productivity increases in Australia for decades and help to kill industry here in Australia. I don't just blame the unions as our political elites have also done their part too. When the NBN was being rolled out Corning wanted to build a fibreoptic plant in Australia if they went with fiber to the home even that could not get the ball rolling. The debate around nuclear power here is a clear demonstration of our political system, short on facts and loaded with idology with no view to what will actually benefit us as a people.

[@greg.kasarik]

Thanks for this! 🙂 As an Australian, I find myself always looking forward to any of the kind of analysis, especially yours, as your realism is an antidote to those analysts who don't even have the problems you recognise on their radar.

[@leonieprice2932]

From an Aussie - we’re not called the ‘lucky country’ for nothing. First we had the fleece of the sheep’s back then one raw material after another and all at a time for the maximum return for the least effort. When the ‘ka-ching’ keeps rolling what’s the incentive to make it harder than it needs to be? As our Aussie singer, Richard Clapton so eloquently puts it, ‘We’re doing fine in the lucky country, doing alright ‘cos we’re making money.’ At least for the time-being…

[@Eatherbreather]

Aussie here, we don't just sell raw materials and buy them back as finished products, we also sell our ports, airports and farms as finished products 🤷🏻‍♂️

[@brendanedwards2277]

Love your work Peter but a few points: 1) Yes we sell alot of our resources to China but when that stops the only one that will take a hit is our iron ore, we already sell most of our coal elsewhere and the LPG will just be directed to our Asian countries instead of China as they're a needed resource. 2) Moving up the value added chain, we can and we can do it at a reasonable pace as we have the expertise (BHP built a brickette plant in Port Headland within 18 months etc), it's just cheaper to ship off the raw material and buy it back as a finished product at the moment, if it changes we have the expertise to pivot. 3) Sub Prime - that was US banks giving home loans to people that couldn't afford them, our Government implemented laws basically saying to banks, if you give a loan to someone you know can't afford it, then it's on you if they can't pay, and this was before 2008! our banks don't have bad home loans on their books, the only issue we have is if the housing market will crash, but with 320,000 new migrants each year coming hear - and needing houses, I can't see that happening anytime soon.

[@alfredneuman1179]

number 2 is is plain wrong - as we own the resources (crown land) we can theoretically (not bhp and the spot market) control the price - there is no reason why we couldn’t copy what Korea, Japan, Germany etc are doing - and beat all these nations in price as we (as already stated) own the resources that the others have to buy from us - it is a complete clusterfuck of an industrial policy that South Korea gets australian gas cheaper to run their industries than it is available to domestic producers… and economically wrong to pick mining and bhp as winners as the real money sits in the value add

[@brendanedwards2277]

@@alfredneuman1179 we can't control the price - period! we've given the rights to private companies to extract our resources out of the ground, THEY sell to the open market at the going rate, if Korea can negotiate better that the Victorian Government with Chevron then that's our Governments problem. Should we be running it ourselves? hell yes, but have you ever dealt with a Government department? that's what it would be run like, too many people doing nothing and the company hemorrhaging money, our gas would cost twice as much as the market price!

[@tonybloomfield5635]

Spot on with all three points.

[@DrTTube]

2. He said that the outcome could be as was with subprime collapse in US, not that Australia has subprime loans. If real estate is financed at outrageous prices, economy takes a hit, people lose jobs, what will happen to the loans? When loans fall behind and banks are responsible, will they panic, foreclose and put the properties on the market to recoup the principal? What will happen to the market if this happens in large enough numbers? How many bank failures can AU system handle?

[@C.Fecteau-AU-MJ13]

The FIFO workers are gonna have to think hard about financing that new pair of jetskis... The tragedy 🙁

[@boris325]

The Irony...

[@JamesTsividis]

Mining contributes a large amount to the tax revenue for the government. This will affect many people.

[@joythought]

​@@JamesTsividisexactly. Our economy is a quarry which pays for everything else, from jetskis to one of the best mix of public and private healthcare per dollar spent in the world. We can kiss a lot of things away in the future if he is right and we don't have a massive immigration intake of young tax payers to prop up our retirement and social policy scheme, healthcare, small business economy, housing market, etc.

[@Fanta....]

The jetski and landcruiser subprime will hit very hard when the CCP run out of funny money

[@Puppydoug]

The iron...@@boris325

[@craigt5301]

Well done Peter. Excellent assessment of the OZ economy and our future. We have created such an enormous problem / asset bubble in our housing market. Now an everyday topic of conversation, especially if one has friends or family who are unfortunate enough to be renting.

[@MadsPeterIversen]

Do you make one of these for Scandinavia too? :)

[@aarone8013]

History shows that Australian politics has little time or capacity for well-thought-out, logical, appropriate strategies that risk benefiting its own industries - let alone citizens...

[@WolfMage888]

Sounds just like the US! At least we are in good company.

[@mattmillane9956]

That is not what history shows at all. History shows that Australia is one of the richest high income places in the world ( in large part due to deliberate gov policy to let markets operate independently in most sectors ), spends treasure and blood to defend itself, and has imbedded itself in global alliances led by world powers. Ie it’s a world class nation led by and large by world class politicians

[@langdons2848]

​@@mattmillane9956what I've seen in my lifetime is our manufacturing die, our housing market turned into a ponzy scheme, and our vision contract to "digging stuff up". The CSIRO used to be a world class pure science organisation that made breakthrough discoveries that lead to new technologies and industries. Now you can't do any research unless you can show how it's going to make money in just a few years. Australia's ability to do real things has been consistently gutted for decades and whatever we might once have been, we are not that now. And all the skills and knowledge that was built on are fading or lost. We can rebuild, but it will be a *very* long road - if any leader actually has the vision and courage to try.

[@soullessnight6539]

Love it when Americans talk down about other countries politicians when American politicians are the butt of jokes around the world😂. All other countries have free health care while Americans can’t even go to hospital if they have no money.

[@WTF00007]

Blindly following america the hopelessly indebted sinking colony of Israel

[@peterarmstrong8613]

Australia once had world class steel making factories with the help from B.H.P in collaboration with metallurgical scientists from Sheffield in England. And the mighty Vickers Ruwolt to name a few. Sadly all gone now.

[@byza101]

Wages too high, as well as all the red tape. We can’t compete internationally. We did so much better in the 1950’s

[@rideroftheweek]

We still have Bluescope steel

[@byza101]

@@rideroftheweek is Bluescope as big as it was 20 years ago? Bigger? Or smaller?

[@stewartcash555]

​@@byza101 Thanks to the unions, in the late 70s to 80s we became to fat and lazy with manufacturing, had it to good for to long something had to give

[@warrencurtis7442]

Build that railroad to connect iron supply with a future steel making industry.

[@MS-gx1tk]

Thank you Peter, would love if you could talk about Australia more often!!

[@Davdan-sy2qj]

As an Aussie, I can’t agree more with everything you’ve said in this video. It’s hard to hear the truth like this but so long as our political system has 3 year terms, the politicians won’t make any long term policies if they involve sensitive topics such as climate because they know that it will be political suicide at the next election. We have become a very selfish, short sighted nation that is far removed from the one that the world used to value us for 😢

[@troycassidy6177]

During Covid Australia made a major pivot towards India, we have the quad alliance with India, Japan and USA now so that should help our markets also.

[@70sVRsignalman]

India is over rated, and of doubtful reliability.

[@Jason-yd6mn]

need to be careful we don't do same thing with India though is my thought

[@VioIetShift]

I'd honestly be curious about what happens to New Zealand in this scenario - their fate is tied to Australia, but they also have a very different economic setup. Since Peter's alma mater is in New Zealand, he probably has thoughts.

[@timh6845]

Kapiti cheese and ice cream is his favourite and he can’t get it in the US for love or money.

[@JimNZ]

@@timh6845 Kapiti is what I'm eating right now... men they do know how to make icecreams!

[@JimNZ]

I'm curious too! We are tied to Aussies and also China. Also, the 3 'amigos' of the coalition doesn't seem to have a clear, unified vision of NZ moving forward either

[@joythought]

It is a good point. NZ made themselves irrelevant to the US in 1984 and Australia made itself the US's best ally when we didn't fuss when that happened and despite Nugan Hand bank being a CIA plot and the internal opposition to Pine Gap both sides of politics remained strongly pro-US alliance every time it mattered.

[@VioIetShift]

@@joythought ANZUS is sorta-halfway back on (US ship port calls resumed), and the current government seems to be hinting at the possibility of opening ports to the AUKUS submarine fleet, reversing the "no nuclear propulsion" policy. This could hint at longer-term strategic thought, but my thought is that it's a day late and a dollar short. What I'd like to know Peter's thoughts on are if NZ /can/ ride on Aus's coattails, or if it's going to be forced into a more pro-US position if it wants to do so.

[@SageLending]

Australia does not have a subprime problem, it never did. I've been a mortgage broker in Australia since 2004. The extend of Australia's subprime problem was association with and reliance on the US. Lending in Australia is very highly regulated and controlled. Always has been but it got significantly stricter after 2008. Most of the problems in the finance sector in 2008 occurred because local lending had heavy ties to the US, plus the Australian economists saw the problem occurring overseas and reacted poorly and unnecessarily to it. Since then Australia has diversified finances to be significantly less reliant on any country. Australia will likely face a recession at a future point, eventually every country does. But that's a result of other economic factors, not lending policy.

[@twonicetwice]

You are so right ,love hearing you

[@roberthoward9500]

Housing likely won't go down in Australia simply because we have a lot more people than homes. We are not building homes fast enough for property prices to drop.

[@simongibbs9392]

And the ones we build won't last more that 20 years.

[@alfredneuman1179]

jeez - that is what Peter is highlighting - government intervention and failed policies have propped up the market - all that can change - just a question of when

[@roberthoward9500]

@@alfredneuman1179 Problem is people have been predicting the housing crash for 20 years. It can't happen though until supply catches up with demand.

[@VanWonderer]

costs 400K to build a house and most places outside of Sydney and Melbourne are under 800K, also comparing Australia to US subprime is little moronic, Australian banks do not give 6 loans to illegal migrants with no job or income verification, bankruptcy laws are very different as well

[@nicholassmith7984]

But we're not building the infrastructure to make those homes viable. The reason everyone is trying to cram into the city centres is those are the only places that are properly service. Any further out, public transport is too sparse and roads can't handle the traffic. And you better hope you can afford a car, because nothing's in walking distance.

[@harrybuttery2447]

China collapsing(which I don't think will happen, decline maybe collapse no) would not be the death blow to the Australian economy that a casual observer would think it would be. For starters, the Australian economy is fairly insular, we are primarily a consumer economy with exports and imports not making up that much of our economy compared to other nations. We are ranked 140th for Export to GDP and 169th for Imports to GDP, this is out of 179 nations. Secondly while China is our biggest trading partner they are not our only trading partner, in 2022 they made up 27.6% of our exports and 21.5% of our imports. And all of this also ignores India who are a rising economic power hungry for exactly what China imports from us.

[@noelkelly4354]

In other places (his books) Peter says being low on the Export:GDP and Import:GDP is a good thing. I think he's being relative. A Chinese import collapse will be a big thing, relative to historic Australian recessions/depressions.

[@chrispekel5709]

@@noelkelly4354 I think you're right. The fact we may not be able to eat out and get smashed avo toast for a few years is pretty much the great depression for most of us

[@noelkelly4354]

@@chrispekel5709The thing is, If you can keep your job, with no reduction in hour/pay, the downturn in invisible day-to-day. The ones who feel it are the who become unemployed or have much reduced pay. Historical, if this total figure gets over 25%, a total collapse in social cohesion becomes a problem. This is why the Fed govt rightly doubled JobSeeker for 5 months, early in the pandemic.

[@villz1267]

Spot on analysis, as an Australian i can attest to everything this guy is saying. Very succinctly put.

[@Intentionallyhomeless]

You said that well. To well.... almost like you pulled it from a news story I read yesterday 😂

[@joythought]

As an Aussie I appreciate your perspective. Respectfully, I think you will be surprised by how resilient our property market will remain even in a major economic downturn. In the 1989-1990 global downturn, places like Melbourne were hit hard. Commercial property collapsed. The interest rates on home mortgages got up to 16% for people but people held on by cutting everything else and working extra jobs. The private home market only fell in a few areas and recovered fast. Aussies are insane about property and haven't had a good buying opportunity in their lifetimes if compared to the US or other markets. So be prepared to be suprised on that. Otherwise our politicians have understood from the fall of Singapore in WW2 onwards thatt only the US matters as our military ally. While the UK had to convince themselves in WMDs, we went into Iraq eyes wide open knowing the evidence wasn't real because we know we go with Uncle Sam. That offends a lot of Aussies who don't understand what's in our lobg term strategic interests. Geography as well as demographics is destiny. 😅😂

[@alfredneuman1179]

because it got propped up by government intervention - just as Peter described - u watching the same video as us?

[@mikemactavish1665]

Australia over Great Britain?? Expound please. Not disagreeing necessarily just surprised.

[@fickle1207]

It may not collapse, but doesn't affect the truth of low housing affordability, a problem for social tension. In fact, I think we'll have a "soft landing", where the living standard of the rich will continue to predicate on the poor, mainly due to the reluctance of the government to change the status quo of the voters.

[@ivancho5854]

I really don't understand the enduring controversy about WMDs in Iraq. Iraq had chemical weapons before the invasion. They used them against Iran in the Iran -Iraq war. They used them against their own people. Remember Chemical Ali? It's all documented. They had Scud missiles to deliver them. The coalition didn't find them. Fine, they were no longer in Iraq. A while later Syria used chemical weapons against their own people. This is verified by the UN. Iraq and Syria have a huge border. WTF makes this puzzle so hard to understand? On the point of Australian housing I think that you're in for a huge shock. Best of luck mate. 👍

[@chalermako]

Doth protest too much, methinks ..... If you bought property near the 1890s peak then it took you seventy years to break even.

[@TenOrbital]

Most positive piece I’ve heard from Peter about Australia. Australian governments left and right follow the fashion with minor differences of emphasis. Neither is doing anything about China or housing, but they both agree on the third point, building out vertical integration and rebuilding manufacturing. Mostly focused on defence. Pity we closed down those light vehicle production lines. They were a bargain at only $400m a year and would have been handy in a crisis. Maybe on the rebound.

[@tsubadaikhan6332]

General Motors is no longer a light vehicle producer. It's a Government Subsidy Factory. That's the only reason they survive. Right up to the end they were importing wheels from Detroit to Australia, obtaining Subsidies from both the US and Australian Governments to do so. It was a stupid economic move. Unfortunately, subsidies just breed people good at collecting them. What needed to happen was the Government buying all it's light vehicles locally, from whoever supplied the best product. But then Government personnel couldn't roar around in BMW's that have no resale value anymore, because they are built by German Engineers focussing on ridiculous EU Emission Laws, instead of longevity of service life.

[@TenOrbital]

@@tsubadaikhan6332 - yeah that’s just detail. I’d put you in charge of it because those light vehicle lines needed to be managed as a national strategic asset.

[@stylembonkers1094]

When you say, doing something about housing, you mean what?

[@andrewmckenzie292]

There is no difference between mainstream Labor/Liberal in Australia, at least not anymore. The lack of an genuine party divide is even more pronounced here than in the US. The bickering in Parliament is so obviously staged, they probably joke with each other in the halls of Parliament how their ripping us all off, that's if their not doing the hanky panky with likes of Brittany Higgins.

[@ozzybloke4830]

@@stylembonkers1094 Lack of supply vs demand causing higher prices and higher rental costs pricing people out of owning property in Australia.

[@happyhappynuts]

Peter is broadly right but wrong on specifics. Australia has primary lead smelting (US doesnt), produces raw steel (US tends to use pig iron from overseas), massive producer of alumina and decent amounts of aluminium. Flour is milled in Australia but most users of flour overseas like India, China , Arabian states etc want to keep their mills running. Australian housing is nothing like sub-prime because loans are full recourse and besides housing is in shortage. In USA subprime, they gave liar-loans to those that couldn't pay e.g. no job, that's not the case in Australia

[@georgegeorgiou227]

Great piece Peter, thankyou. A couple of points in no particular order. 1. We used to make steel and other things but we just dont have the comparitive advantage right now for those products. If conditions change in the future, i think we have the knowledge and resources to change direction. 2. As for mortgages, we have alot of borrowers above 80% LVR and serviced to the hilt and they are vulnerable if we cant get inflation down, but on the otherside there are over 300k of new Australians entering the market and our construction industry cant keep up with demand, so not sure whats going to happen there. Maybe theyll balance themselves out and we just see a flat line for a while.

[@michaelanderson4684]

Hi Peter, there is a major difference between the US and Australia on housing. The US had non recourse loans which allowed people to walk away, whereas Australian housing mortgages are personal loans. The Australian people have a deep commitment to their homes and will do a lot to keep them. The recent problem with high housing inflation in my view has been driven by a sustained high migration policy which has been concentrated in the major cities instead of being decentralized.

[@RM-yk1oi]

how does that explain the housing price boom during the pandemic, when we had no migration?

[@Amanda-uc5jq]

@@RM-yk1oihow many people got stuck over here?

[@5hauney]

Migration? Yeah nah I think you'll find more financially literate Australians and overseas investors have taken hold of the housing market in Oz. Every day Australians never knew what a property portfolio was.

[@linmal2242]

And Flash-in-the-pan Leb? developers rushing to build multiple dodgy? units/apartments for quicksale ! Tower blocks of them all over SYD some bankrupt. Not as bad as the China model but like that!

[@Paddy234]

It has nothing to do with high migration policy. Yes this has made it worse in the short term but The housing crisis started when Australian borders were CLOSED. Only the small minded blame immigration because they don't understand complex economic problems. There are much more complex reasons to this economic mess but the problem isn't immigration, thats largely the solution as Australia has a HUGE tradie shortage which has created the construction backlog in Australian history. Many people still don't have a house built after 3 years of construction. How is this an immigration problem?

[@brutalborat5468]

Love to see a New Zealand , After America video

[@user-uc6hh1rm4w]

err....ok......"same number of sheep after America, as before"......there you go.

[@brutalborat5468]

Ok pin head @@user-uc6hh1rm4w

[@user-gx3ky5pl1w]

always love your perspective

[@MichaelSorensen-bl3ec]

Very insightful.

[@EchoBravo370]

Nothing like living on a really big island on the southern edge of Asia, apart from natural cultural allies to REALLY understand, we, Australia, exist and blossom, under the protection of the American-led Western alliance. No ifs. No buts. Just the way it is.

[@SeattlePioneer]

Before the Americans, Australia was protected by the British Empire. When the Brits went to War in WWI and WWII, Australia loyally supplied a lot of troops to defend Great Britain under the command of the Brits. But when the Japanese bombed Australia, Australia discovered that the role of Australians was to protect GREAT Britain. Australian Troops were in North Africa. Since MacArthur landed in Australia, Australia has transferred that loyalty and support from the British Empire to the American World Empire. But when push comes to shove AGAIN, as it inevitably will sooner or later, will Australia make a similar discovery about the United States? Australia is important in the world of the American World Empire, but the natural foreign policy of the United States was enunciated by America's first President, George Washington: "No entangling foreign alliances." This was restated even more concisely by another, recent American President: "America First." Where does Australia fit in with an America First foreign policy?

[@somethingelse9535]

@@SeattlePioneer Trump did lump Australia with the Europeans in one of his anti foreign diatribes, he appeared after a visit by the state department (or was it the pentagon?) and rolled back his comments, and left Australia out of his complaining. If an American president can't turn on Australia, it must mean the alliance is pretty damn strong. By past observation, the strongest alliances have always been between culturally similar countires, especially those with a common language. The West in general will be a strong alliance, the anglosphere especially so.

[@jw-vx8im]

We Australia should have been the Switzerland of the south Pacific with limited immigration and enhance the opportunities for our citizens. I don't think we have truly grasped the wealth our natural resources have provided

[@SeattlePioneer]

@@somethingelse9535 Ireland and Britain, would be an example?

[@somethingelse9535]

@@SeattlePioneer Nope, UK, Aus,Canada and US are examples.

[@JayWhittaker1]

It has endlessly frustrated me that decades of successive Australian governments have failed to encourage moving up the value chain with anything like an industrial policy that is aware of where the world has headed. Often encouraging the opposite and short term action at the expense of long term benefit. Profligate giveaways and undermining progress. We need to rewire our economy. carefully, prudently but it needed to happen decades ago. Next best time is now.

[@VanWonderer]

why don't you do it yourself honey? almost $4 trillion sitting on Superanuation funds looking for place to invest, you want government to build chemical plants?

[@billedifier8584]

@@VanWonderer Don't fall for the labor party propaganda. Superannuation funds ARE invested, they are not parked idly in an at-call bank account. Have a look at your own super account investments, you will find that they are allocated in various quantities to property, industrials and financials both in Australia and overseas. Only a small portion is in cash.

[@VanWonderer]

@@billedifier8584 non of super is in Cash, they're not stupid to hold cash are they? but rather then holding bonds that have negative real interest rates the super funds are more then happy to invest in real performing assets especially when Government is requiring portion of money to be invested in Australia What I'm saying is that rather then expecting government to build industries (which will never happen, PM didn't even know inflation rate, you want that idiot to build a steel mill?) do it yourself Jay boy

[@leadwipe]

American here. Australia is a great friend to the USA and I hope that our two countries will prosper together.

[@charliehotel6476]

I agree with everything you just said. The only thing that I'd add is that if we're going to manufacture things here in Australia, we need to invest in automating everything. The costs involved with wages, union interventions and injury claims is much higher in Australia. People complain about automation due to less jobs in a work area but I'd prefer that over no jobs due to not being competitive.

[@jantschierschky3461]

As an Australian, the non value adding is my biggest criticism of the Australian government and business. To me, it is insane how the Australian government screwed the industry.

[@budawang77]

The Liberal National Party (Conservatives) have been the worst for de-industrialising the country. Their constituency are miners, graziers and landlords.

[@spermwater]

I get the whole beating on Australia for not climbing the value chain on its raw goods, however the economics has only now become viable. The Australian processing industries would have been out competed by Chinese cheap labor and CCP protectionism by subsidised inputs aka no tax and free electricity for the past 20 years. It was this exact CCP strategy which hollowed out the US's aluminium smelting industry.

[@jantschierschky3461]

@spermwater value adding could have been done decades ago, especially urea, steel, and many more. In the 80s, Japan paid $18/MT iron ore and sold steel for $220/MT. Steel manufacturing was eliminated in Australia. Despite having the coal and iron ore and needed infrastructure.

[@andyedison2416]

⁠@@jantschierschky3461 You better tells the workers at Blue Scope that they don’t produce steel. We can’t compete with the mass produced, low quality Chinese steel, but Australia still produces a quality steel product.

[@jantschierschky3461]

@@andyedison2416 I am talking 30 years ago, bluesteel only makes steel in SA. Port Kambla shut years ago. Btw I am talking specialized steel

[@phoneticau]

As a Aussie living in Melbourne I can agree with you and the over leverage in real estate, we are one big housing ponzi scheme

[@chrispekel5709]

It's also a Ponzi with hundreds of millions who would buy into it, and so long as they keep coming....

[@andrewmckenzie292]

That's in addition to Dan/Allan's Big Build (Big Rort) scheme. Endless budget blowouts, they just don't give a fu*k...their union mates/corrupt bureaucrats and probably corporate partners would be raking it in. Unions/corporates probably in collusion these days. Unions totally forgotten about where they came from.

[@dylerturden01]

Yep. Just watch Site Inspection. Aussie housing market is one giant shamozzle

[@nikobellic570]

House markets are always a Ponzi scheme. So is a lot of the economy if you zoom out far enough

[@reggrunow1460]

You don't know what a Ponzi scheme is...Like everyone else who makes that inane statement...

[@adriansumner1412]

Well said man. And yes we'll always have your back

[@silentblackhole]

Australian banks had very small exposures to the US housing market and US banks, partly because domestic lending was very profitable. The housing crash was an American issue, our housing market has been and is strong. There isn't a loan quality issue in Australia. The housing market is unaffordable to the average person but the people that do have loans have the ability to service those loans. One thing I do completely agree with is our (I'm Australian) relationship with the US. We feel like the little brother of the States. We are so similar in our vales, cultures, world outlook etc. We have always worked with the US from the varpy founding of the country. We have gone and supported the USA in EVERY Major and minor wars and conflicts. We also felt and greatly appreciated the strong USA support has shown us since our founding. I feel like it really stared in earnst during World War II when the Britsh could not come to our aid (understandingly) as Japan rampaged through South East Asia. We ask the US for support and they came and fought alongside us. That will never been forgotten and is part of the reason we support the United States everytime when they are at war or conflict. Good perspective on Australia overall and I would be interested in any further content you have involving Australia.

[@MaraudersWorld]

Peter ... As usual ... spot on. While many of our current pollies don't have a clue ... the people know ... so hopefully we can get these muppets back on track for the future of Oz and the US.

[@budawang77]

Don't whatever you do vote the LNP back into power. Their constituents are the miners, landlords, real estate agents and bankers.

[@janoskardos835]

This should be a must-see for Australian politicians, so they could change their attitude from “she’ll be right, mate” to a more proactive one.

[@chrispekel5709]

They completely understand what the problem is, but it's too hard to fix and they don't want to be the one standing there when properties crash. It's an attitude of 'she'll be right mate...for the time I'm here' I believe

[@stylembonkers1094]

You don't understand what you're talking about. In case you haven't noticed, if they're not interfering in other people's businesses, employments and lives, they don't know what to do with themselves. Your ideology of government as Santa Claus is a primitive superstition.

[@gxex1]

Where can I read more on the Australian subprime problem? This is the first time that I hear about it and i’m really surprised!

[@ufargarnidgit1927]

Last time I checked, no one guarantees your loans in Australia. That's what loan insurance is for. The Government does guarantee your bank savings up to $250,000.

[@campfireeverything]

ALL FOR the ongoing partnership with USA, as an Aussie!

[@nicholassmith7984]

As long as we can stop importing all their worst ideas.

[@milliechook7375]

If our government had any realistic plans, they would be reindustrialise as well. We have the raw materials, we have the agriculture, we should be developing secondary industry.

[@miguelcomas3157]

Labor force?

[@shaneashby5890]

Won’t happen the Communist in the Australian government will never allow that.

[@user-ek9go3kf2w]

We don't have high qualify engineering and research to compete, efficiency is low. Increasing the realestae price takes most of the inflated money printed in Australia. There is no room for production efficiency when the costs has to fill the huge salary and industrial renting cost. What China offers when you want to invest, free land to build the plant?.

[@milliechook7375]

@@user-ek9go3kf2w Of course we can't suddenly start manufacturing next week. However, we did produce many of our own products here in Australia, as others in the comments have recounted. The government needs to work towards assisting with infrastructure and training, possibly expanding the 'Australia Made' movement.

[@allo-other]

I suspect that American "solidarity" with Australia is based less on "long friendship" than it is on the geostrategic plus of having a large-landmass, friendly, English-speaking nation in the south half of the Pacific. As an Aussie ex-pat, I agree that enriching a few billionaires through selling of natural resources to unreliable Xina is beyond economically risky.

[@stylembonkers1094]

So government is the best decision-maker? Or it's not? Which?

[@allo-other]

Irrelevant question.@@stylembonkers1094

[@ashdivakaran9664]

Pretty spot on. I work in the mining industry & the military in Australia and the lights are beginning to turn off. We’re heavily unionised and productivity is on the decline. Now we sell our land to ourselves for millions to appear to be rich.

[@linmal2242]

And to others including the best farming country to the Chinese of all people ! NUTZ

[@Drippydogetter]

The ozzys !!! We love you guys from us

[@tomshady3530]

Peter, I am a big fan, but you never really explain HOW it is, that after USA stops protecting trade lanes, that trade will collapse. Pirates? Crashes? Disputing waters?

[@TerryT420]

0:35 I though I was watching Breaking Bad there for a moment. Pete's videos are "tight, tight, tight!"

[@HeadHunterz1985]

I am from Australia Peter. And everything you said is 100% true you have nailed absolutely nailed the Crux of a lot of Australia’s current problems and why we cannot move forward. Our government has been failing us for the past easily 30 years. Selling off all our manufacturing and production while not diversifying into the new technologies and or manufacturing we now sell to china.

[@chippyjohn1]

No, it is the US that has ruined our economy. The US has bought most of our mines and banks, supermarkets, superannuation.

[@yt.damian]

All Australian home loans are FULL RECOURSE. No matter what the borrower owes the full debt. Australia has a big issue with home loans (and home prices) but its not because of sub prime or no/low recourse home loans.

[@aPeaceOfAdam]

This is just not true and I don't know why people keep peddling this myth. Australian homeloans are secured by the underlying asset and, in high risk cases, mortgage insurance. If you can't pay your mortgage you lose the house, that is by definition non-recourse. If the lender cannot cover the outstanding mortgage with the sale of the house they have very few avenues to come after you to get the money back. Throw in that our mortgages are insured by a single insurer called Hella (Genworth), which is exactly what the US had with Lehman Brothers, and there are structurally very few differences between our market and the US one other than ours has never been tested and our banks seem a little bit more "British" in their culture (which is actually a pretty big thing, being willing to work with a defaulter to ensure they don't default).

[@yt.damian]

The loans are secured by the underlying asset. And you still owe the difference. Mortgage Insurance is to protect the lender not the borrower and it only covers the difference between your deposit and a maximum of 20% of the loan. The lender will then come after you for the remainder just like they do if you are uninsured and you are involved in a car crash.@@aPeaceOfAdam

[@Doris-dx6eh]

Yes and no - unlike sub-prime where borrowers just handed the keys back and walked away if you default in Australia you owe the bank any shortfall and they can come after your other assets. If no other assets then yes - but that is why you have lower LVRs in Aus. If you as the borrower want to go higher then sure you can pay lenders mortgage insurance - which insures the bank, not the borrower. In that case it’s now the insurer (or whoever they sell the debt to) coming after your assets and getting you made bankrupt.

[@travishenke4536]

Some quite interesting points made here, I agree we in Australia need to actually get into value adding - this has been a weakness for some time. And yes we are too reliant on trade with China. One thing I think Peter has a serious misunderstanding of though is the housing situation here. We do have some serious problems with housing affordability and the amount of housing supply, but this is very different to the Sub-Prime mortgage crisis in the US. The government here doesn't guarantee home loans essentially at all, and house prices are going up - so if home owners cannot afford their current home they can sell, and probably still make money on the sale. Also, interest rates are relatively high but this has been expected for some time and isn't quite the problem we thought it might be for existing home owners. Our problem here is people who are renting and/or not yet owning a home, are finding it harder to afford reasonably afford to buy/rent at the level they have had in the recent past.

[@alfredneuman1179]

not what Peter said - and as a matter of fact the australian government does guarantee savings as well as a blank cheque that “a” bank can’t fail - the measure of the gfc that australia took to prevent a crash are still in force - as for “affordability” - this is just a dew policy changes away - to pretend it will never ever happen is just naive - and most likely as Peter mentioned more than once due to external triggered shocks

[@fickle1207]

You're right. I did feel it's not right when he mentioned the government guarantee, but sort of carried away by all other comments. Great point. The government props up property prices as the golden goose. Could have done better for the well-being of the majority, but whoever deflates the bubble will probably lose the next election.

[@joythought]

💯. Nailed it.

[@joythought]

​@alfredneuman1179 OP is right on all counts. Peter misunderstood property and the risks. Our market can remain solvent far longer and far higher than will make sense to any American. Major banks in Australia and major banks in the US have similar levels of financial protection. US has guarantees on customer assets and major banks have FED support programs and are internationally recognised as significant which basically guarantees their survival. So that argument is not a point of difference. We don't have the risk of a subprime situation.

[@joythought]

​@@fickle1207right!

[@1toneboy]

I don’t think it’s true that Australia was never up the value chain. In the 1930s Australia was highly industrial. I think we started deindustrialising in the 1970s-80s.

[@peterlinsley4287]

In the 80s, we had steel manufacturing, weet milling, large dairy manufacturing facilities, and aluminium plants. We closed them down and sent them overseas in the 90's and 2000s. Australia's biggest steel plant in Newcastle. BHP, closed in 2000.

[@user-jb4ei8hi7n]

My parents ran a wheet mill, a weat mill and a weet mill

[@JeremyRogers.]

Thanks Peter you pretty much backed up all my recent thoughts on the state of Australia. Cheers.

[@wylergnu]

So to summarize.....she'll be right mate.

[@TotallyRooted]

‘Balls to the walls expansion’ dude you nailed it

[@benguillemet6392]

Incredibly well worded. You're knowledge of the Australian economy, and it's reliance on raw materials was spot on. As an Australian, I had never even thought about our complete lack of "levelling up" the chain, and it's potential impacts. We actually went the opposite direction a while back and got rid of all our major manufacturing. Our economy now feels very fragile and susceptible to political influences. Metaphorically speaking, we are farmers who don't know how to kill and cook our livestock. So we now rely on the butcher and baker as much as they rely on us.

[@Xlerv8]

The taxes from resources have never really trickled into our economy hence why our infrastructure, health, schools etc always suffer for funding. The top end of town don't really pay much taxes. It's always the ones who can least afford it, lay the most of the tax burden.

[@vaticinus]

Peter Zeihan Please do Nigeria, After America next. 👍👍

[@TankEnMate]

The interesting thing to watch out for will be whether the Australian govt will support moving further up the value chain; i.e. supporting polysilicon / perovskite manufacturing and lithium processing as opposed to just digging it up.

[@nicholassmith7984]

They'd be stupid not to support it, But then again, we are talking about the Australian Government...

[@patrickpeake3935]

Right now our construction, energy and labour costs mean we would struggle to be competitive further up the value chain. A drastic change in our trading arrangement with China would rectify this but only after the impact becomes blindingly obvious.

[@brendanh8193]

Firstly, there is a new lithium processing plant in Western Australia. The government has backed the industry to the tune of 1.3 billion dollars. Secondly, Twiggy Forrest is setting up green steel production in Gladstone, Queensland. We have been a big exporter of Aluminium. So it is headed the right way. We should be partnering Indonesia more, in a similar way that USA is partners with Mexico.

[@TankEnMate]

@@brendanh8193 Indeed, we should partner more with neighbours. But we can't have the same relationship with Indonesia that the US has with Mexico; Indonesia has over 5 times the population of Australia.

[@mikecawthorn7806]

You ve got some interesting points there Bud. But you should view Australia more like Alaska American , Canadi Australian, New Zealand have a close affinity as they were all populated by the same personality traits, that is these ppls traversed the oceans facing peril determined to withstand hard ship and death in order that they could offer their children a better life. We are of like mind. As a foreigner when u travel America, you realise that it is a union of 50 groups of similar personalities. Each group determining their groups propertity with in the view of overall unity. Because of these traits we fundamentally are not too dissimilar to co-operate. You should view Australians like the remnants of the 49ers its the easiest thing to pick up a chunk of gold off the ground and sell it, than spend years developing a gold chains and rings industry as the buyers of those things are elswhere. We take the portion of the trade we are viable with and leave the rest on the table for the deal to work. Sub prime. Our banking system lent on service ability to pay a mortgage and was not open to packaging of financial jumbling. In Australia you can not walk away from a mortgage like you can in the US. The property is sold on your behalf, and you are then left with the debt to repay if anything is left. Aussie bank loans are 20% deposit, bank under values by 10%, max loan to income 30% of taxable income from tax records. We did not have a New York ponzie scheme to correct. Hence our banks have a 30% buffer and a realistic understanding of capacity and are more likely to extend terms on a non perpforming asset to overcome short term fluctuations as repossession bankrupting and chasing debt is very bad business, both Short and long term damaging.

[@fyiaustralia9686]

Australia was once self-sufficient in a lot of manufacturing sectors including oil refineries, steel works, alumina refining. The manufacturing base has been sold off to foreign interests since the 1980s, especially China and SE Asia, where Australia needs to buy back our manufactured raw materials at value-added cost. Case in point - Australia has considerable reserves of uranium ore but we export all of that because nuclear energy is illegal here.

[@scottmclennan6114]

Yep car industry gone, steel industry gone, and all we have is an economy geared to a real estate scam for rich investors.

[@KRS-ro6oi]

Do one on Scandinavia, and Norway in paticular? The one country in Europe moving against the tide? Energi-secure, food-secure (Worlds second largest seafood exporter), "young" poulation (5 youngest in Europe), aprox 10 national budgets in savings (NBIM), not a member of EU but a founding member of NATO.

[@farzana6676]

Norway is in a very good financial position but way too small(population wise) to be relevant. An economy the size of Minnesota- a medium sized US state.

[@pr7049]

​@@farzana6676 In future though more important. Whole nordics would be more interesting Iceland, Denmark including autonomous Greenland with melting ice and mining prospects, Norway, Sweden, Finland. 🤔

[@KRS-ro6oi]

@@farzana6676 Valid point. Fun Fact - Minnesota has the second largest number of norwegian ancestry after North Dakota.

[@user-ek9go3kf2w]

Norway has big gas and oil resources and is not connected to much with either Russia nor China . Australia is too connected with China. Aussies are buying Chinese cars like mad lately.

[@KRS-ro6oi]

@@pr7049 We tried that in 1388. Norway turned into "more or less" of a colony until 1905. It will never happen again.

[@carlsenden]

You hit the nail on the head👌🏻

[@russellwaterson3304]

I have seen Australia kill off its industry. We used to make our own Aircraft, process our own steel, had a car manufacturing industry as well as electronic and white goods, etc. But the various governments have over the past 40 years have gone the easy way of mines, oh and mines, and of course more mines. It means a few rich mining companies but no skills of factories left of making stuff from our own raw materials. We can't even build houses that much any more.

[@kenfowler1980]

We used to do make steel etc etc etc. but American companies among others decided to off shore all of our industrial capacities. America has to get through 2024 particularly after November. And I agree we need to start brining back our value adding industries and become far more independent than we currently are! Cheers

[@VanWonderer]

there are two large steel and five Aluminium smelters in Australia with hundreds of fabrication and engineering companies, opposite to what you're saying Bluescope operates several steel plants in US and no American steelmaker operates in Australia at a scale

[@EchoBravo370]

Yes. My grandad used to work at a steel plant in Wollongong. Bring them back!!!!

[@billedifier8584]

I remember how cheap petrol was before we had to pay overseas prices!

[@VanWonderer]

@@EchoBravo370 steel plant in Woolongong is still there and they make massive profits every year, they are spending big $ on expansion not to mention gas import terminal, hydrogen plants, new power station, data centres, wind farms and possible nuclear sub base that Wollongong region will host soon

[@kenfowler1980]

@@VanWonderer similar to Whyalla- I was trying to point out to our American friend what happened to a lot of our industrial base during the last 30 or so years

[@JinKee]

Finally, in the reflection we can see Peter’s camera crew

[@joythought]

😂.

[@gdawwg1125]

the problem is our wages are too high to manufacture anythying

[@robcooper5813]

And union demanding killed it

[@boombeesharkful]

Peter has done well with this video. Another problem is we don't have enough people to do down stream processing. While Australia may have a population of 25-26 million much of the mining and all iron ore is in the West... with only 3 million people. All industrial processing and manufacturing capability is over the other side of the country. In fact, one of the biggest Iron ore miners built a processing plant near the mining facility about 15 years ago. They spent around $3 billion (today's money) and it was a total failure and now completely abandoned. There is another example of a failed ammonium nitrate project also in North west. Point is, mining in Western Australia has been proven profitable and processing is seen as very high risk that even biggest companies have failed at. Where would you invest your money?

[@john_doe_not_found]

Australia doesn't have to build electronics or cars, just the small step of refining what they produce would be a huge value add. What limits Australia is people. To set up flour mills, coke ovens, smelting plants, etc requires people. Australia has a very low unemployment rate already (sub 4%). Everyone who wants to work is already working. They'd need to add millions of people to operate the mills. Which would require thousands of doctors and other medical staff to meet those people's needs. And 100s of thousands of construction workers to build it all out. Australia and Canada have both been ramping up immigration, maybe it is a plan already underway. edit: Hope Australia remembers to build housing for all those millions of immigrants, or nobody but the rich will own property.

[@langdons2848]

We haven't had a government with any vision (be it about value adding raw materials or our housing market) for 40 or 50 years - basically my entire life. It's extremely depressing seeing our country stop doing almost anything beyond digging stuff up or growing it. And to answer the question at the end, "will we start restructuring before the bottom fall out?" The answer is "no". We no longer have any real leaders with vision in the country. Everyone is risk averse and just pretend that the China/good-times are going to roll forever.

[@sillyquiet]

It's not just your government, it's just about *every* 'western' government that has gotten so myopic with regard to policies. Short term thinking, short term memories. As long as you get a good sound bite or blurb or statistical uptick in time for the next election, no need to think beyond.

[@yeahnah7220]

Add another 300 million to our population and yes, we too would have a more diverse range of domestic product. The truth is, digging stuff up and farming has been and will continue to be the bedrock of our economy. You don't look a gift horse in the mouth or ignore your strengths and advantages for the sake of being different.

[@langdons2848]

@@yeahnah7220 how does that in any way preclude us value adding? Especially to agricultural products?

[@langdons2848]

@@sillyquiet sadly true 🙁

[@yeahnah7220]

@@langdons2848 CSIRO are responsible for the Hendra virus vaccine, BARLEYmax and Southern Blue Fin tuna was practically brought back from near extinction in South Australia thanks to aquaculture innovation We could also be major players in green steel thank to our abundance of wind and solar resources. Australia is just as capable of innovative solutions and industrial diversification as we've ever been. Just because 4000 people aren't clicking in and out of a factory down the road it doesn't mean those 4000 aren't to be seen elsewhere.

[@sharonszova2691]

Hi Peter, with regards to sub prime ~ should people sell now ~ or try to ride out the fall out if possible?

[@phazix6529]

That audio was immaculate for being on top of a large open hill