Times are tough all over

[tw]

Originally Posted by Aliantha

I note tw, that having fixed rate mortgages hasn't saved the US economy, or any other country's economy.

American is chock full of ARMs - variable rate mortgages - sub-prime mortgages. ARMs are one reason why mortgage backed securities all went crashing at the same time. America 30 years ago did not foolishly market or apply for ARMs.

The way I read it, Australians were doing the same irresponsible mortgaging that Americans were doing - ARMs - sub-prime loans.

Fuel prices also contribute. However, to subvert responsible action as a result of higher energy prices, America mortgaged itself (ie 0% car loans) to avoid and ignore the necessary recession. While whining Americans complained about high gas prices (ie $1.80 per gallon), Americans continues to say to industry, "Make the most stupid vehicles that only an accountant would design." Americans complained about high gas prices, then bought even more SUVs. Gas had to go to $4 per gallon before Americans said, “Oh, energy not something to waste.”

BTW, the same stupidity occurred in 1970s America. Then when patriotic Americans with Japanese citizenship provided superior products, Americans put up tarrifs and other corporate welfare to protection the problem. Deja vue.

Then America said the economy is no longer is dependent on energy. Well, those energy bills have yet to start causing job losses - another lesson from the 1970s.

Essentially, you are saying Australians were doing the same money games that business school graduates were promoting in America. As I read it, Australians are not suffering due to events in the American economy. Australians are suffering because they did exactly same as Americans.

Meanwhile, Australia is far more attached to commodity exports. Have economic changes in commodity markets also contributed to problems in Australia? If so, how?