And few more after that.
Iron ore plunges below $50.
"The falls have sparked speculation the Reserve Bank of Australia will cut interest rates again next week to boost the economy."
News.com think it is the bad news. In fact, the whole resource boom was a bad news. It has made a damage to the economygreater than WWII and all hostile activities of foreign spies brought together.
In short, resource boom:
1. Did not benefit any Australians except these holding mining shares
2. It did generate only handful of jobs, as all mining processes are highly mechanised and automated
3. It allowed RBA to keep interest rates artificially high, which resulted into two things:
a. Non mining sectors of economy largely destroyed
b. Building stagnation which lead to the housing crisis
Thanks God, this insanity depleting Australian natural deposits for a song has come to an end.
Now RBA has nothing else to do but cut rates to 0%. And this is not going to help - additional stimulus will be needed.
Low interest rates combined with the housing shortage can only result in one thing - property boom.
Last Saturday Auction Clearance rates in Sydney reached 88% - highest figure ever. This was despite the state elections and the record number of properties auctioned. Real clearance rates shot well above 90%, as for some obscure reason properties where auctions were cancelled prior still count as not sold, and for another even more obscure reason Sydney auction statistics include areas well outside Sydney.
Just a reminder for the people who did not follow my previous posts:
1. Australian property booms ALWAYS start from Sydney
2. After Sydney they ripple to the rest of the country
3. Adelaide starts booming approx 2 years after Sydney (which is now)