Accusations of Racism in Australia

A couple of months ago when I decided to write about this topic, Australia and racism were two words that dominated the Australian media. With attacks on Indian students every week, the Australian and Indian media fanned the discussion of racism in Australia. It is my opinion that Australia is not a racist country but does have racist elements like any other country. However, I would also say that Australia is a much more tolerant and egalitarian society, more so than most countries but in particular India, which continues to be plagued by religious, caste and class divisions.

Firstly the numerous attacks on Indian students were not because of racial hatred but because of disregard for personal safety. Most of the attacks occurred at night in locations where there were hardly any people. This just plays into the attacker's hands and it is no surprise that this was a common feature of these attacks. I'm in no way saying the attacks were the victims fault, but rather there are precautions most people take and unfortunately foreign students may not be aware of those cautious actions which could have prevented the attacks.

Then there's that Hey Hey it's Saturday skit which had the Americans deeply offended. You can watch it here:


Anyway I think the world has moved on past the racial tensions that have separated societies in the past. I can understand American opposition to the skit but from the audience's reaction it was hardly viewed as a offensive and I think it is acceptable in Australia because of our larrikin culture and ability to take the piss out of anything. Just like many Islamic societies are socially conservative in comparison to western societies, Australian audiences are different to American audiences. I'm glad Australia viewed it as a humorous skit and not despised it due to a perceived racism.

My favourite, world has gone mad story related to this issue is the "racist biscuit". You know the PC brigade is out in force when you read a headline like this.

http://www.smh.com.au/national/coles-backs-down-over-racist--biscuit-20091027-hhhk.html

The whole idea that Australia is a racist nation is propagated by those who have not experienced Australian society or do not understand that a small degree of xenophobia is normal for most societies. Australia is a country built on migrants and is becoming increasingly multicultural which is evidence of a tolerant and welcoming society. I will reiterate that Australia is one of the least xenophobic/racist countries in the world and any tensions that are on display are normal given our diverse mix of cultures and people.

This will be the final post on this blog. I have found that I do not have the time to pursue this interest and it is unfortunate that the journey ends here.

Carpe Diem.

September 2013 EDIT:
I had to include this map, enjoy!

Asset Bubbles

In a capitalist system, the market forces of demand and supply is driven by people. Thus if the market represents the aggregate view of its participants then it is prone to bouts of fear and greed just like its participants. When greed takes over, it will drive the price upwards with many bears asking themselves, "What are the reasons for these higher prices?" The irrationality of greed is the answer to this question.

So how do we spot a bubble? We look at price inflation and see if incomes can sustain those prices. At the top of markets the general populace are the most bullish. Prices appear to be vertical when viewed on a larger timeframe. They are "self-reinforcing" on the way up and brutally fast on the way down as people realise the boom is over.

As with the US housing bubble, many pundits will claim that the price rises are justified for any number of reasons including strong economic growth, population growth/migration, low supply and high demand. What is not talked about is the amount of leverage (debt) in the market. Like any market that uses debt as the primary source of funding, the prices of the market will be affected by monetary policy of the central bank and the lending policy of the banks. Once these two factors put enough pressure on demand, asset prices will collapse. Higher interest rates and tougher lending policies not only put pressure on the housing market but also on jobs and hence average income per person declines.

The Sydney property market has risen remarkably over the past decade. But are the price rises justified by population growth, income or anything the pundits claim? No. You only have to compare median income with median house prices and you will find Sydney to be one of the most unaffordable cities in the world. See here: http://www.demographia.com/dhi.pdf

When this bubble eventually pops not only will banks fail but the economy will grind to a halt as it deleverages in a similar style to the US.
It's not just economic but social and political change that comes about through economic shocks. The rise of the Nazi party from hyperinflationary Germany, collapse of the soviet union and rise of the US, the south American debt crisis giving rise to socialist governments. The world as we know it will change.

Another bubble that is generating a lot of debate is China. This bubble is a mix of inflation and the belief that Chinese growth will continue forever. Who's to say that this isn't another 1980s Japan style bubble inflating in China.

Fixed currency rates have been another problem that has inflated many bubbles as history has shown. Several South American countries during the 1980s and early 1990s had fixed exchange rates that caused their economies to implode as the bubble popped and were forced to float their currencies causing further instability. The Chinese government thinks it can micro-manage a capitalist economy. But only when they wake up to an economic bust will they realise how fraudulent their growth has really been.

Even the Chinese stock market is treated like a casino as the index has been rising at an unsustainable pace. It was not surprising when I read a news headline that the Chinext exchange went up 300% on the first day. It is clear that the Chinese will have a lot to deal with when the house of cards tumble and it will be interesting to see how the single political party state deals with the crisis.

I will end the article with a quote: "There is no means of avoiding the final collapse of a boom brought about by credit expansion.

The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."