hey all, i just wanted to know if the current economic climate means it's a good time to buy. it seems like most companies are making their prices as low as possible to be able to get business.
am i right in thinking this? this is what austrian economics say, right?
thanks
it seems like most companies are making their prices as low as possible to be able to get business.
I am no economist. When the economy is in recession, most people wouldn't have spare money to make purchases anyway. If companies have to lower their margin to get business, that might not cover their operational cost. Whole thing is just going to go spirally downwards — I guess that's what characterised a recession.
However I'll say Australian economy is relatively well comparing to others in the world — at least it's perceived this way. Look at AUD for example, which enables Australians to buy and import goods and services in low price. So yes it would be a good time to buy.
It would have huge impact to the "bargains" listed here if AUD drops back to 65c-75c USD.
good time to buy what?
Many consumables will be cheaper after christmas. If it comes from overseas, now is probably as good as it gets in relation to exchange rates.
Recessions can also knock out weak competitors making the market for some things more expensive.
Aud keep getting stronger towards usd.
might be the correct time now.
What recession are you talking about? Australia is growing only slightly less than average.
The only economy currently in recession is Japan, I believe (although the UK might be close).
IF we are in recession, then another factor comes into play.
Bankrupt companies can't pay bills, service products sold etc etc.
I have no idea at what point of the cycle we are at, as we are being propped up by China's boom and its still a controlled economy, so we have limited true market data on what it's economy is really like. BTW I am not saying its bad/good just harder to judge.
History only helps after the event.
In the 1930's most forget that the depression started in 1929, but was at it's worst in 1933/4. Now where are we?
If I knew that I wouldn't need to be a bargain hunter….
http://www.abs.gov.au/ausstats/[email protected]/mf/6202.0
Unemployment rate = number of people unemployed/ number of people in labour force.
The change in discouraged workers, for one of the recent quarters was 0.1% of the working age population, 15 million in Australia. 15,000 people. (That's not many people which further adds to the sensitivity of the numbers.)
UR (Before Part Loss) = 637.4/(637.4+11546.4)*100 = 5.231536958912654508445640933042%
UR (After Part Loss) = 622.4/(622.4+11546.4)*100 = 5.1147196108079679179541121556768%
Predicted Fall in Unemployment 0.12%
So, even a small discouraged number of workers. 15,000 people can lead to massive falls in the unemployment rate.
Remember in one of the previous quarters the lost participation rate was 0.3%
The equivalent change back then was:
UR (Before Part Loss) = 637.4/(637.4+11546.4)*100 = 5.231536958912654508445640933042%
UR (After Part Loss) = 589.7/( 589.7+11546.4)*100 = 4.8590568634075197139113883372747%
Predicted Fall in Unemployment 0.37%
So, why isn't our unemployment rate that low if so many people dropped out in one of the previous quarters? AND CONTINUE TO DROP OUT, i.e. 0.1% in the latest ABS statistics above
For the ones that are left, that means it has definitely got tougher.
We should have unemployment rate of 4.85% if everyone just dropped out and the other guys kept their jobs, but they didn't. If we count the lost jobs, we also have to tinker with the number of employed. (Thus we should invoke Ceteris Paribus for the example above).
Unemployment statistics are very sensitive to changes in the participation rate.
http://www.news.com.au/business/breaking-news/unemployment-r…
Here it mentions the drop in participation rate, but you can get better statistics on the ABS, but I haven't got time to do search through the older archives.
My opinion, someone at the ABS is fudging the statistics to make the participation rate fall. Or we are a weak country that drops out of employment when things get bad. Choose one, I think it's the first one. The big newspapers keep writing articles about where is Gen Y, where are the workers. Now you know why they are writing them, because they believe the second option.
It's a small sample size, they can just re-sample until they get the numbers the government needs, tinker and tinker with the participation rate. They don't just ask whether you are unemployed, they ask whether you actually looked for work in the Labor Force Survey. The same occurs in other areas that need to get funding, psychiatry, climate skeptics, environmental groups, university phd students, all research basically.
Careful, you don't get your finger burnt whilst looking for bargains. You have to understand the numbers.
If your job is on the line, you will fudge the statistics. I know I've done quite a lot of it.
http://dilbert.com/strips/comic/2012-06-22/
Corrected for working age population.
Can you please add a conclusion in plain English? I don't get it at all..
I havnt studied this sort of stuff but I would think it is a good time.
When production slows down, prices go up I think. I think production has started to go down but things are cheap as were still buying older stock .
Just throwing this out there for comment I guess.
Here's a simple way to know if we're at the stage where its good to buy. At the bottom of the cycle, the majority of the population will shun consumerism. People will be desperately trying to pay off debt, stay afloat, stay employed/get employed. Investments like houses and stocks are shunned like the plague while anyone who can afford to buy brand new stuff, even Altos and Barinos etc are looked at like millionaires.
Have we reached that stage? No, therefore, the answer is no for now. I would keep building up that war chest.
You have to factor in that technology gets cheaper all the time, or rather you get more for your money in the future. IMO the time to buy is when you need it and there is a sale or rebate on, and not a moment before. And never, if you don't need it.
Can't comment on cars or houses, can't afford those. :)