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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (30294)	4/28/2005 5:33:23 PM
From: GraceZ	Read Replies (1) \| Respond to of 306849

When you're carrying staggering debts, relative to your income, as consumers in the US and UK do its difficult to make big percentage increases in your debt load. You've stumbled on a truth here and that is that debt service, as a percentage of income, is relatively stable over large periods of time. Primarily because individuals have an upper limit in their ability to service it! It moves up and down within a very predictably narrow range. It is a self correcting problem. I'll amaze you further with the insight that each consumer's debt in America is four times larger than it is in Australia. What is the per capita figure? Household debt to asset ratio? Debt service as a percentage of disposable income? If you actually look these figures up for yourself instead of drinking the coolaid downunder I think you'd be surprised that while the night sky looks different down there, the Sun and the Moon are the same. Now that you realize any change in small numbers results in a large percentage change, you'll be less amazed next time you run into this aspect of math. The high percentage change is due to the same monetary effect on asset prices you keep harping on that is a problem here. Why is it a problem here and not there? Because the RBA has what you perceive to be "better intentions"?