Hi Aeldric

Interesting article which in some instances may be a bit too positive and in other cases exemplifies the "what should I do". According to Kiashu I would classify as a doomer. Personally, I am a pragmatist and realized a fair while back now that the recession will lead into a depression and in the US this could be far worse than in the 1930’s. Back then hungry, unemployed people went back home to live and work on the family farms which are long gone since we followed the path of industrial agriculture. So as the US heads into 2009 there is likely in the first instance to be a short recovery as the touted 800 billion stimulus package is thrown at the economy on top of the 700 billion financial services bailout. Add to the belief by many Americans that their messiah Obama will save them from the idea of having to do with less and there will be a short term rally in confidence and possibly spending. We will call this the “Obama Effect” then when reality sets in and unemployment carries on up and malls close by the hundred, the chant of the hoards will be “See that’s what happens if you put a Blackman in charge”. The same would have been true if it had been Hillary Clinton eg “see what happens if you put a woman in charge etc…

So, now the car makers have been given a short term lifeline with about 13 billion taken by Chrysler and GM, but they only have until the 31st March to prove they can be viable. So most likely scenario is one or both will go down and possibly Ford leading to about 240,000 direct and 2.5 million indirect job losses. The overall trend is supposedly 1 million jobs a month going in the US by mid 2009.

With all those unemployed in the US, the demand from China is not just slowing it is going belly up in some instances. US companies are extending payments for goods out to 90 or even 120 days from the usual 30-45 days and Chinese companies are being forced to seek credit to pay for raw materials from their suppliers. Many of them are consequently going bankrupt or are refusing to send goods until they receive payment, which is effectively freezing trade due to lack of available credit. Effectively nobody trusts anybody to pay their bills!

I think a good read if you haven’t already done so is Dmitry Orlov’s book “Reinventing Collapse” and his articles on the subject. Basically, the five stage go financial collapse, followed by economic collapse .. read the articles http://www.energybulletin.net/node/46667 and http://cluborlov.blogspot.com/2008/02/five-stages-of-collapse.html

Anyway, to the big question of what all this gloom and doom means for Australia. We won’t ride out this global depression with a slight slow down in 2009. Most likely there will be significant layoff’s in the mining industry which has already started. In turn all the miners who previously had so many investment properties will be trying to offload them onto a market already over supplied with over priced property which will continue the downward spiral in prices.

Melbourne has seen a significant price drop in the last year and in Perth where I lived until a year ago the out suburbs have seen price drops of upto 25 per cent and the median house price has dropped by about $40,000.

So, I sit and write this from our small farm in southern Tasmania where we now each work part time since we were able to get debt free by moving here. When we don’t work we pick up useful country skills from milking cows and making cheese to carpentry, hunting and fishing and fence making to name a few. We have retrofitted an old farm house with solar and hydronic heating and will be off the grid when the PV goes live.

The whole question of big money or not really depends on your level of debt. Do you require a big salary to pay off car loans and mortgages or can you make do with a smaller place and have more time to prepare more. Time is your greatest asset otherwise you may find too soon you have spent much time debating and thinking and you are suddenly in the middle of a shit storm you knew in your heart was going to happen. Remember “Needs are few, wants are many and learned”