Naked Capitalism Link of the Day

Today's link: Will Aussie housing go bust? at MacroBusiness:

A funny thing is happening in Australia. At a time when the economy continues to flourish, Australian families have gone on a spending strike. Unemployment is low at around 5%, interest rates are neutral rather than contractionary and not a day passes without the public being told that Australia sailed through the global financial crisis undamaged, thanks to China and of course brilliant political leadership.
But the average punter doesn’t seem to believe it. Families are paying down debt like there is no tomorrow. Australia’s household savings rate has now hit an extraordinary 9.7% of disposable income compared with about 5% in the USA and close to zero in New Zealand. This is a multi-year high for Australia.
Retailers especially are unhappy and are blaming the weather, online vendors, the Government and just about any one else they can think of. But sales revenues continue to shrink and high street shops continue to close their doors. ”For Lease” has made a big come-back.
The problem, as Keynes elucidated many years ago in his “Paradox of Thrift”, is that if everyone saves at the same time to create a buffer against looming adversity, it just makes the whole problem worse because those savings suck demand out of an economy.

It is interesting to me that this is happening while the Chinese fueled commodity boom is still going on.  But I guess the U.S. housing boom ended with the mini meltdown in August of 2007 (although I've also seen April 2007 given) while the rest of the economy still appeared to be healthy, then built up to a climax in September 2008.  It will be interesting to see what happens down under.