Juggling Dynamite

Danielle was a guest with Kerry Lutz on The Financial Survival Network, talking about recent developments in the world economy and markets.  Here is a direct video link.

Important points covered in this segment.  “Fed up” author, and former Dallas Fed insider, Danielle Dimartino Booth explains the harm done by central bank policies that have incented mal-investment for individuals and corporations, leaving households and the economy weakened and risk exposed heading into the next correction.

Here is a direct video link.

Australia is a beautiful country full of great people now entering the payback period for a decade of financially suicidal decisions. Et tu, Canada? See Avocado Toast looks a better bet than Australian housing:

Some are waking up to the potential trouble ahead, with Australia’s household debt now nearing 200% of disposable income. Moody’s downgraded 12 Australian banks and their affiliates Monday, citing rising risks associated with the housing market, following a similar move by Standard & Poor’s last month. The country’s four biggest banks alone have a $1.1 trillion exposure to Australian housing loans, making up 55% of their total portfolios, according to Morgan Stanley .

Worse still, nearly 40% of home loans now are interest-only, meaning borrowers don’t need to repay the principal for a certain period, usually five years. Such loans work fine when house prices keep rising. The worry now is that prices will start falling as Chinese buying interest wanes: Meanwhile, homeowners who have only had to pay interest on mortgages could see a rise in payments as the interest-only period on their loans expires.