A Lesson Lost on Them

Americans that lived through The Great Recession of “Ought Nine” will not soon forget the lessons learned and in fact US savings rates are up; consumer debt has fallen like a rock.

In the end, history will point an impeaching finger at liberals whose “high-mindedness” led to the most catastrophic and costly financial crisis in American history.

And yet…

Grants of as much as [$16,000] to first-time buyers and the lowest interest rates in 49 years have emboldened more than 40,000 young [home buyers] to take out home loans since October, stoking demand for properties that cost less than [$385,000].

These buyers may be vulnerable when interest rates begin rising, potentially triggering a jump in foreclosures that will drive down property prices, cut profits at banks and damp household spending, which accounts for half the economy. A surge in defaults in America was a key trigger for the financial crisis that pushed the global economy into its worst recession since World War II.

History repeats itself indeed, only this is in Australia, where the toilet swirls the other way and lessons are apparently learned the hard way.

“We’re mirroring what happened to the U.S. three years ago, when people who shouldn’t have been in the market bought houses,” said Martin North, managing director of Fujitsu Australia, a Sydney-based property-consulting company. “It’s a strategy set for an unfortunate outcome.”

G’Luck, mate!