End of Australia: Reaching This Tipping Point Has Been a Long Time Coming

[PUBLISHER’S NOTE: Vern Gowdie’s new book, The End of Australia: The Real Story Behind Australia’s Coming Economic Collapse and What You Can do to Survive It, is in print and will soon be on its way to readers who order their free copy online.

If you are unsettled by the direction Australia is heading in economically, worried how bad things are going to get before they turn around, and want some simple strategies for protecting yourself, you should claim your free copy while stocks last. For now, here’s another brief teaser of Vern Gowdie’s call-to-arms…]

The future direction of the Australian economy is something no one has experienced before.

In addition to dealing with the vast quantities of debt and entitle­ments embedded in the system, the rapid advancement of auto­mation threatens to disrupt employment in many sectors.

Navigating our way through what is shaping up to be as defining a period in economic history as The Great Depression is the challenge I’ve attempted to address in this book.

What will the coming Long Bust look like?

What will it mean for Australia?

What happens to the money you have invested in property and stocks, in bank accounts, in bonds and in precious metals? We explore these issues in the coming pages.

But there’s no sugar-coating it. If the research I’m about to unwrap for you is correct, the Long Bust could destroy the savings of Australia’s middle and upper class. I know that sounds stark. But believe me, it’s happened before. And it will happen again.

Imagine the 2008 crisis TIMES 50.

Imagine a period where there is virtually nowhere safe to put your money…and few ways to get it there even if there was. That’s why, if I’m right, you need to take precautions NOW. At some point, and history bears witness to this, it will simply be too late. You and all the wealth you have will be stuck. Helpless. At the mercy of events WAY beyond your control.

We got a very small taste of what this might feel like in 2008 and 2009.

You may or may not remember the pressure the Australian banking system was under in 2008.

According to The Australian on 21 June 2010:

‘[Australian] Households pulled about $5.5bn out of their banks in the 10 weeks between US financial house Lehman Brothers going broke [September 2008] – the onset of the global financial crisis – and the beginning of December [2008].’

The demand by panicked depositors for physical cash put a strain on the RBA’s cash reserves:

…the Reserve Bank’s strategic reserve holdings of $50 and $100 notes started to run low and the call went out to the printer for more. The Reserve Bank ordered another $4.6bn in $100s and another $6bn in $50s.

In addition to depositors wanting to hold their cash close to their chest, overseas investors wanted their cash back as well:

Balance of payments figures show that in the immediate aftermath of the crash, Australian banks were called on to repay $50bn in short-term debt to international investors who refused to roll over their exposures.

When people lose confidence, everyone wants cash…more specifically they want their cash.

In 2008/09, central banks and governments were able to restore calm and quell the panic. Offering $1 million deposit guarantees. Printing money. Reducing interest rates.

When the next crisis hits these emergency confidence restor­ing options won’t be available. Rates are now at rock-bottom, deposit guarantees are already in place and, ironically, when the next crisis hits we’ll know that printing money did not save the world after all.

Then what happens?

The events of 2008/09 were a great example of how massive, complex and far-away monetary events can adversely impact Australian investors. Even if, economically, we got off compar­atively lightly.

Yet with all the talk of ‘the Australian Economic Miracle avoiding a recession’, it’s easy to forget that Aussie stock inves­tors and retirement savers were hit hard during the Global Financial Crisis. Since its October 2007 high, the ASX 200 has lost 18% of its value. By comparison the US S&P 500 index is up 40%, and the UK’s FTSE 100 is at breakeven.

Aussie stocks have suffered more than any other major index from the subprime bust. And that’s despite a domestic commodities boom that has raged until recently.

Now imagine what’s going to happen when the exponentially larger global debt bubble bursts.

And when there is no mining boom to shield the Australian economy.

The truth is, when the Long Bust is upon us, there is nothing you or I (or anyone, for that matter) can do to stop it. But that’s not the point.

There is something you can do with your money. You can analyse the situation and try to prepare for what comes next. So let’s get started.

[PUBLISHER’S NOTE: It’s not the normal run of things for a publisher to publish anything for free…let alone old-fashioned hard copy books.

But as you’ll see in The End of Australia, the normal run of things is ending…

Some messages are so important they trump turning a profit. With the take-up for The End of Australia already larger than expected, we won’t be able to keep this offer open for long. To order your free copy while it’s still available, go here.]

Vern Gowdie has been involved in financial planning since 1986. In 1999, Personal Investor magazine ranked Vern as one of Australia’s Top 50 financial planners. His previous firm, Gowdie Financial Planning was recognized in 2004, 2005, 2006 & 2007, by Independent Financial Adviser (IFA) magazine as one of the top five financial planning firms in Australia. He has been writing his 'Big Picture' column for regional newspapers since 2005 and has been a commentator on financial matters for Prime Radio talkback. His contrarian views often place him at odds with the financial planning profession. Vern is is Founder and Chairman of the Gowdie Family Wealth advisory service, a monthly newsletter with a clear aim: to help you build and protect wealth for future generations of your family. He is also editor of The Gowdie Letter, which aims to help you protect and grow your wealth during the great credit contraction. To have Vern’s enlightening market critique and commentary delivered straight to your inbox, take out a free subscription to Markets and Money here. Official websites and financial eletters Vern writes for:

To read more insights by Vern check out the articles below.

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