The Rentier Burden and Increasing Fuel Prices
This is another 'picture is worth a thousand words' post.
Increasing debt service (and other rentier charges) represent an increasing proportion of declining real household and business incomes.
Fuel prices represent an increasing proportion of declining real household and business incomes, and they are subject to exchange risk.
Many households and businesses will never be able to repay their debt under any circumstances. They are being kept alive by bank credit created out of thin air. It's being orchestrated by an incompetent neoliberal government.
Australia did not experience the GFC because it spent heavily using money created out of thin air. It wasn't borrowed money to be repaid, and it didn't jeopardise the futures of next generations.
Our largest trading partner, China did the same at that time, benefitting our country through the terms of trade.
That lack of a GFC event did nothing to quell our appetite for credit. Our household debt to GDP is the highest in the world.
Prices that many oil producers need to stay in business are unaffordable for many highly indebted householders (and businesses). Only a debt write-off can temporarily restore purchasing power.
That won't happen. There's no understanding or leadership for that.
This chart is easy to understand and monitor.
If the household debt to GDP keeps going up, and oil prices keep going up, as they currently are, then economic collapse awaits. It was high fuel prices that drove the GFC - See 2008 above.
Of course, if the Middle East blows up, and the oil flow stops, then it's curtains.
For you deniers out there.
We don't make stuff. We dig holes, using lots of energy.
We grow lots of food, using lots of energy.
Nothing happens without diesel trucks. It takes about a month before everything grinds to a halt.