Chickafinty ~ A Life in the Laundry

A word on housing "affordability"

Ross Greenwood was on the Today show this morning, spruiking the possibility of a new housing boom based on the "increased afforability of homes".

What the??

Affordability (apparently) increases when demand is high and interest rates low i.e. the current situation.  Huh??

I thought affordability was the ability to "afford" the mortgage repayments.

Let's look at a smaller example for a minute.

Demand for enormous flat screen tvs is high.  Interest rates are low.  According to the current economic model the affordability for flat screen tvs must be huge.

But it isn't.  A quick look at our bottom line indicates that we cannot afford a huge flat screen tv.  The interest rate is irrelevant if the repayments cannot be made in the first place.  The number of flat screen tvs is irrelevant if we cannot afford to buy one.

The average house price in Sydney is $544000.  By what measure is this affordable?  Over half a million dollars for the average home, when the average income is $60000.  On that basis you need TWO average wages to "afford" ONE house.  Huh?!?!?!?

The economists have gone mad, but that wouldn't matter, except that the government is relying on them to run the asylum.

Simply explained

Step 1: read this (link opens in new window)

Step 2: substitute $8000 tax credit for First Home Buyer's Grant,

and there you have the situation of thousands of Australians.

Some of them will be all right.  Most of them won't.

When will this debt madness end.

The Golden Parity Party (and that's not good news)

We're hit on all sides by the media.  News comes prepackaged in ever-decreasing bites and it is easy to just let it all happen.

Ever since I happened upon Chris Martenson, I've been paying much closer attention to the news, especially the economic news, and asking some questions...sometimes here, sometimes elsewhere.

Then I found Steve Keen, a local bloke (and economist) from the University up the road, and I began to listen even more carefully to the news.

I am not "into" economics.  In fact, just a brief glance at my mark in the HSC for economics will indicate that 40% of the students who studied economics that year did better than I did.

But even a limited understanding of economics can lead to the asking of questions that are being ignored in the MSM (main-stream media), or brushed over by the economic reporters.

Here's just a few questions that I wold like to propose:

1.  How can 27100 people have lost their jobs in Australia in August but there be no change to the total unemployment rate?  Sounds like someone is cooking the books to make things seem rosier than they actually are.  Why are they hiding the information and what are they frightened will happen if they tell the truth?

2.  Why has the price of gold shot through the roof in the last two weeks?  The gold price is (quickly) sandwiched between commodity prices and the currency rates on the news.  It's usually stated without comment.  So what, you may ask?  Gold has broken through the $1000 an ounce barrier.  That's BIG news, but no one is mentioning it in the MSM.  I wonder why?  (see point 3)

3.  A parity party is becoming more likely.  What's a parity party??  That's when the US dollar and the AUD are both worth $1.  It means the Aussie dollar is stronger, but that also means that the US dollar is weaker.  The weaker the dollar, the more money being used to buy gold rather than currency. (See point 2.)  Gold, unlike paper money, has intrinsic value.  A dollar is only worth a dollar because the Reserve Bank (or the Federal Treasury in the US) says it is.  Gold has -real- value whereas paper money only has imputed value.  The Aussie dollar is currently at about $0.86US but that figure is slowly climbing.

If the Aussie dollar is climbing against the greenback AND the price of gold is sky-rocketing, that probably means a loss of confidence in the American dollar, forcing those who know what they are on about to buy gold rather than paper money (or any assets grounded in paper money like bonds and securities and things...I said I was no economist!!)  High demand for scarce resource = high prices.  Why is gold going up?  Because lots of people are buying gold.  Why are they buying gold?  They have no confidence in currency with imputed-only value.  Why this lack of confidence?  There's a debt bubble about to burst.

Steve Keen has had a lot to say about dodgy economic theory and practice on his website and I encourage you to have a close look at his site and his articles, especially the one today which was published in the Sydney Morning Herald.

If you are further interested in this subject, may I direct you to Chris Martenson and Karl Denninger, who maintain comprehensive websites devoted to the GFC and what it means for the little person.  Unlike me, they know what they are talking about.

It seems to me that it's better to know what's going on, than to stand back afterwards and say "I didn't see *that* coming".

On falling short

I am typing in the midst of a mess.  Piles of paper, empty jewel cases (the cd kind), a dvd spindle, about 148000 old business cards belonging to Mister Bear from his former job.

There's stuff on the floor, on the desk, on the window sill.

There's boxes of scrapping stuff not yet unpacked from the Girls Night In two weeks ago.

The dining room is not much better. We haven't done any dining in there for quite a while.

The sofa bed is piled with sheets and towels that have to be inspected before they can be folded and put away.  Chickabid had a huge play in the flooded poo pit last week (don't ask.  please, if you love me, don't ask) and some of the stuff on the line got fouled.  I am trying to screw up the courage to deal with it, but no success yet.

The lounge room is passable...so long as you ignore the filthy carpet overdue for a steam clean.  The bedrooms- over them we shall draw a veil.

The toy room is fine so long as the door stays shut.

I am a child of the King, but my life is so screwed and flawed how can His light possibly shine out.  I'm at the end of my ability to cope.  I'm writing over here about what's really going on, and where I think we're headed and why.  I am torn between this life which is commanding so much time and effort, and the life which is to come.  I guess the biggest encouragement is seeing for the first time that the "great ones" of the Bible weren't really all that great after all.  They were fallible, frail human beings just like me.  They made mistakes - huge ones some of them...Peter and Moses immediately spring to mind - but they didn't trust in themselves.  They put their trust in God.  They didn't try to be more than they were.  They certainly didn't hold themselves up as spiritual models "Look at how fabulously spiritual I am", rather they looked to Jesus - the author and finisher of their faith.  Now, going back and looking at their words and actions we can clearly see the light shining through.  But they themselves were oblivious to the light and were only aware of their shortcomings and how far short they fell.

My personal inclination is to throw in the towel and give up.  To stop even trying for that perfection, cos brother, it ain't gonna happen.  But then, some encouragement from Philippians.  We're studying Philippians on Tuesday nights at home group and this verse jumped out.  It's from Philippians chapter 1 and verse 6"...being confident of this, that he who began a good work in you will carry it on to completion until the day of Christ Jesus."

I don't get to throw in the towel.  There is still work for me to do. 

I'll be honest.  I am frightened.  I am frightened not about the end, for I know that is secure.  I am frightened about what lies between now and the end.  The Unknown.  At this time in history we're a mirror of Noah's time.  Noah knew that time was running out and he knew that he had a God appointed job to do.  Then, as now, there were those who mocked and scoffed and chose not to believe.  Noah had the strength and the courage to keep going in spite of the unbelief around him.  He chose to put his faith in God.  The rest of the people considered him a bit of a loony.  That was until the first raindrops fell.  Then they were forced to believe, but it was too late.

There will be more about this line of thinking at the climate change blog, but for the moment I'll say this.

We are nearing the end.  To continue the Noah metaphor, the storm clouds are gathering.  Opinion varies as to what they mean.  Some think it will pass over.  Some think that the clouds are empty.  Some refuse to see the clouds at all.  Some blame the clouds on God, or on his people.  George W is probably blamed for the clouds in some quarters.

Oh, yes.  The storm clouds are there and when they break, all hell will also break loose.  Pun completely and utterly intended.  But on those same clouds will come the Saviour, ready to gather His own.  The clouds that brought destruction to the world in Noah's day meant salvation to those resting in the safety of the ark.  It's worth thinking about and pondering on.

And while we wait, I have some housework to do ;)

Chris, Cassandra, Wall St and the tin box under the bed

I'd like to introduce you to Chris Martenson.  He's so up-to-the-minute that he doesn't even warrant a wikipedia page yet.  He has, however, managed to do in 2.5 hours what Mr Warnes failed to do over two years and that is to get me to understand economics.  His crash course is excellent and I strongly recommend that you take it.  You'll never look at the "boring bits" on the news in the same way again i.e. Dow Jones, FTSE100, price of gold/oil and the dollar/pound/euro against the greenback etc.

Today Chris is foreshadowing a Bank Holiday.  Sounds nice, doesn't it.  It's not.  The last Bank Holiday was for five days in 1933 when Franklin D Roosevelt closed the banks.  Closed.  As in, no money in.  And no. money. out.

How would you do with no access to money for five days?  No credit cards, no debit cards, no EFTPOS, no ATM, no cash, no payments, no direct debit.  Nothing, nada, zip.

Some might consider that Chris is a Chicken Little wildly shouting that the sky is falling.  Others, after taking the crash course and using their brains a bit, might conclude that the sky IS falling.  Furthermore, some may realise that bits of the sky are lying scattered in the street, but everyone's too busy checking their Facebook profile, Thinking They Can Dance or pondering Sarah Palin's shoes, to notice.

I think the time has come to get the tin box under the bed.  It's a euphemism people...there really isn't a tin box under the bed!  It means that I think it's time to consider that nothing is safe, not even the banks.  It's time to pay attention, take responsibility and be prepared.  Lay in some food stocks on staples: flour, rice, butter, milk (powdered!  I mean it!!  It won't kill you), noodles, stock cubes.  Plant a few vegetables, even if it's just a single tomato plant in a pot.  Store up some tinned goods and cereals.  Pay cash.  Pare off everything you don't *need* from the budget.  If the world economy goes under - and it may well do so - your disposable income is going to go kaput.  We're planning ahead.  If necessary we could provide housing for a whole 'nother family in our home and we'd be prepared to do so.  A second family could be accomodated in the garage.  I'm not joking.  The toy room is being attacked today and the toys culled.  We've got double cupboards which are about to become a food store.  I'm teaching myself to sew again and have plans for the vegetable plot.  They've been sort of tentative plans for years, but now it's essential. 

This is the way it could go. 

I *know* our government is saying we'll be OK, our economy is strong, our banks are regulated, our commodities are still popular rah, rah, rah.  That may well be so.  But the days of economic isolation are over.  We are members of the global economy and what affects the US is going to affect us too.

I'd love to think that I've actually flipped my lid, but it ain't so.

Please.  Take the crash course.  Think about the issues for yourself.  Then start making some plans.  The day will come when you'll be very glad you did.

Enter Cassandra

I don't know if you realise this or not, but we're heading for a Depression.  Not the mental health kind, the economic kind.  Think 1929.  Think dole queues.  Think soup kitchens.  Think of people by the side of the road with signs "Will work for food".

Call me a Cassandra if you will, but all the warning signs are there

* over inflated house prices

* very high debt to income ratios

* unease verging on panic on Wall Street

* increasing food prices

* job losses

* a wildly fluctuating US dollar

* NSW mired in debt with major infrastructure projects on hold

* the US government bailing out three major financial institutions while they're running an enormous deficit and two wars

* oil prices

The repossessions and foreclosures have already started here and in the United States.  Probably other places as well.

Nobody in government is saying it out loud.  For the first time someone used the word "depression" on the TV this morning.  I wrote about it last week on news.com.au.  We are heading for a major, world wide depression the kind of which we haven't seen for 80 years.

This would be a really good time to cut up the credit cards and pay out any debts inasmuch as you're able.

Things are going to get a lot worse before they get better.

Is that a fact?

Read this on news.com.au.  Apparently ice shelves that have been there for 4500 years have fallen off a bit of Canada.  This is due to global warming and we should all be very worried.

A couple of questions though:

How do they know that the ice shelves have been there for 4500 years?  Was there a sign attached?  Was there written reference to the existence of the ice shelves?  Has Canada been populated for 4500 years?

Detailed records on geography and weather have only been kept for a couple of hundred years.  How do they know that this has never happened before?

At best it is a guess on both counts based on how things are now.  We don't know what they were like 4500 years ago.

I'm fed up with supposition being touted as fact.

There is more evidence for the existence of Jesus Christ only 2000 years ago and we all know the degree of skepticism that exists over him.  Might be worth cultivating a little healthy skepticism over the ice shelves as well.

Perspective

Colin/Colette the abandoned humpback whale calf that ended up in Sydney Harbour this week just gone has had Sydney abuzz.  The city seems to have been polarised by debate over what should or shouldn't have been done for Colin.  No matter which side of the fence you were sitting, the news on Thursday that Colin was to be put down was deeply upsetting.  On Thursday night I sat on the lounge with a weeping child on each knee as we mourned the decision that had to be made.  Ladybaby in particular was moved by Colin's plight and she kept shouting "But it's not fair!  They shouldn't be killing him; they should be looking after him".

Colin's plight and his eventual death has tugged at the heartstrings of people everywhere.  One lady whom I have never seen before bailed me up in the stationery aisle at Coles to tell me what b******* they are at the National Parks and Wildlife Service.

Two things occurred to me in relation to Colin.

If we are, as the evolutionists believe, nothing more than the end product of a random biological process in which only the strongest and fittest survive, then we have no business grieving over Colin.  He is the result of a natural process; Darwin's theory in practice and nothing more nor less.  Colin's abandonment and demise should barely cause a ripple in our pointless, materialistic, live-for-now-cos-there's-nothing-after mentality.

But that clinical detachment was sorely lacking in the news, in the faces of those on Pittwater devising ever more schemes for saving Colin.  There was no "well that's just the way it is" in the actions of the guy who bought all the milk he could find and poured it into the harbour in the hopes that Colin would somehow derive nourishment from it.  Chickabid and Ladybaby, as young as they are, *knew* that what was happening was an abomination.

I put it forward that it is because we are NOT the end result of a random evolutionary process that Colin's plight so disturbed us.  We are human beings created in the image of God...the same God who made the whales.  We, as human beings, were given dominion over the animals by God (Genesis 1:20-31).  We were instructed to look after all that God had made, to use it wisely and well, and to be good stewards of all He gave us.  The reason that we all felt like we should do something about Colin is because God gave us the responsibility to care for the fish of the sea, the birds of the air and all the creatures who crawl along the ground.

In the perfect world that God created "Colin" could never have happened.  But when sin entered the world through Adam and Eve, God's perfect world was broken.  Colin's death is a consequence of that sin, of that broken world.  It wasn't fair.  It shouldn't have happened.  It is an abomination.  It is a reminder that rebelling against God has serious, far-reaching consequences and it should cause us to take pause and ponder our own mortality and our own attitude towards God.  

Some would blame God and berate Him for allowing it to happen.  Others would claim that it is evidence for there being no God at all because if there was He wouldn't allow this to happen.  I say that our very response to Colin points to the existence of God, the reality of sin and its far-reaching consequences.

The other thing that I wanted to say was brought home by a caller to 2GB and it put the whole Colin episode into stark perspective.

In the five days that Colin languished in the Harbour, over 1100 babies were aborted in Australia.  1100 babies who would have been willingly adopted into Australian families had they been brought to term.  We drive past an abortion clinic every time we go to church.  I wonder how many babies lost their lives on Friday in that clinic?  I wonder how much pain they suffered in being ripped from their mothers?  I wonder why *that* doesn't make the front page of the daily papers?  It is to our collective shame that it doesn't.

Counting down

Free, but at a price

I have daily Urban Legends delivered to iGoogle every day.  One of the UL today caught my attention.  It refers to Bump Day and the offer by Baskin Robbins of a free cup of soft serve ice cream to pregnant women on May 21st.  Sounds great?

Umm, actually, no.  Soft serve ice cream, like shellfish, soft cheeses and processed meat is most decidedly off the menu for pregnant women.  Soft ice cream, because of the temperature at which it is mixed and stored has the potential to harbour listeria...harmless to most adults, but can be fatal to unborn babies.

So, yes it is free, but to the one sector of the community that cannot take advantage of the offer.