TLAW: Aussie economic predictions 2016-2017

On TLAW today I want to talk about what I expect to happen to the Australian economy over this year and beyond. It is well known that the Australian economy is bolstered by commodities. We have been a commodity driven economy. The vast natural resources of coal, iron ore, etc have allowed all Australians to live comfortably. The government coffers have been overflowing and this has fed into increased services and welfare. The good life has been good, but we have been feeding from the trough of deception. Suddenly commodity prices have dropped, big companies such as BHP have almost halved in value.... and this has fed back to significantly reduced income for governments, the loss of jobs and rapidly reducing value within superannuation funds. While times were good we did not save, we spent and we borrowed thinking that there was no end to the good times. Unlike the proverbial ant we did not store away our food during summer. While living of the high, stealing from our grandchildren buy lumping them with debt, we are now beginning to see the cliff face. The Aussie stock market has lost over 15% since early 2015 and there is nothing that will seem to stem the tide. The other huge peg in the Aussie economy is land and housing. With increasing income, government incentives and foreign investment (mainly from China), housing in Australia, especially in Sydney and Melbourne have become unaffordable to those without a stake in those areas already. Despite many years of calling the housing downturn it has not happened. The commodity bust in 2015, which has led to the stock market bust (which will evolve during 2016), I believe will feed into a housing bust during 2017. Already the government is tightening up .... the debt greased mechanics of a social democracy is beginning to crack open. Spending has taken over and there is no acceptable political solution to this - the people will not take their medicine - those who suggest reducing spending will find that they are no longer politicians quite quickly. The current Prime Minister, Malcolm Turnbull will not even consider reduced spending - he plans to remain populist to the end - I suspect, however, that the house of cards may fall on him during 2017. Banks will continue to reduce interest rates this year hoping to stimulate some debt fueled spending on housing. Western Australia has already felt the impact of reducing house prices in the face of the mining downturn. People are beginning to question the viability of fake wealth within the assumed rising costs of a house bought within Australia. My advice to you. Don’t store up your treasures on earth, where moth and rust destroy....and central banks and governments bleed you dry for every cent... look to heaven for your security, store your treasure there. Of course we have to be responsible with what God has given us. Prepare for continual stock market pain during this year. Bet on the fall of the stock market and the increase price on gold during 2016. This may change if the American Fed decides to print unlimited trillions - however the effectiveness of further fake money creation is coming under question. Expect housing prices to remain steady in 2016 and start to fall in 2017. Do not over leverage, prepare this year by putting as much effort into reducing your debt in housing as possible. Consider downsizing or renting if you are desparately overleveraged. Remember that our wealth has been entrusted to us by God. Use it wisely or it will be taken from you.