Just read this:
As you read this, Australia is riding high.
We’ve survived the biggest commodity super-cycle in our history pretty much unscathed. We are a vastly richer country now than we were in 1991.
On 1 April, we will inherit the mantle of having the strongest economic performance in world history.
At the same time, stock markets are at record-highs, just like in 2007.
Bloomberg reports that hedge-fund liquidity just fell to an all-time low. The last time it did that was four months before the 2007 crash.
The Volatility Index, which shows how fearful traders are about the future, is flat-lining. It’s at the same level that it was in 2007.
Just like 2007, every sense is telling me that something big, and very bad, is about to happen.
Only, there are two key differences:
What’s about to happen, on a global level, will dwarf what happened in 2008.
And, while Aussie investors got off quite lightly during the Global Financial Crisis, this next one will bring our nation to its knees…
As I will demonstrate to you clearly, we are nearing…or have already reached… ‘Peak Australia’.
It saddens me to issue this stark warning to you today.
But, if you live in Australia, the warning I’m about to issue could impact you.
If you have children or grandchildren trying to get a start in life, it could impact them.
If you are a businessperson, a manager, self-employed, an employee at a company, or even if you’re retired, this could impact you.
Put simply, I believe a new financial crisis is coming.
And, unlike the last GFC, this one is going to hit Australia like a freight train.
I know what you may be thinking: ‘Australia just dodged a recession. And the economy has rebounded strongly. The trouble is over, isn’t it?’
As I’ll explain over the next few minutes, it’s a terrible mistake to think that way.
The Australian economy is nowhere near as rosy as Prime Minister Malcolm Turnbull makes out.
At the same time our economy was ‘growing’, the household savings ratio fell from 6.3%, to 5.2%. Households were raiding the piggy bank to spend for Christmas.
The last time the savings ratio was at this level was back in the third quarter of 2008…the same quarter that saw the collapse of Lehman Brothers.
At the same time as the wonderful GDP news, the Organisation for Economic Cooperation and Development (OECD) issued a warning…
A ‘significant’ rout in Australian house prices is imminent.
‘House prices and household debt have reached unprecedented highs,’ the report said.
‘A continued rise of the market, fuelled by both investor and owner-occupier demand, may end in a significant downward correction that spreads to the rest of the economy.’
But, you know what, reader?
Worrying as that is, the warning I’m about to issue has nothing to do with that.
It has nothing to do with record-high stock markets.
Or Australians being mortgaged to the hilt. Or China and commodity prices.
It has to do with a specific and local event. One that I thought might’ve been at least a few more years into Australia’s future, but which I now believe is imminent.
And it’s an event which could bring about a grinding halt to the way of life you’ve grown accustomed to.
This looming crisis — which I call a ‘Long Bust’ — is related to the mining boom ending…and to the Global Financial Crisis that central bankers such as Dr Alan Greenspan (more on him in a moment) created with their easy-money policies…but it is infinitely more dangerous to Australians than both of them combined.
And, unlike most of the things we publish here at Port Phillip Publishing, this warning expands beyond the realms of investing.
If you are retired, approaching retirement, or even planning ahead long-term for retirement, you need to hear what I have to say in these pages.
A new financial crisis is coming.
Like 2008, it will be global.
Unlike 2008, it will hammer every aspect of the Australian economy and society.
The man that walks his own road, walks alone
Old Norse Proverb