Living and buying property in Japan - never easier

Australians have barely felt this recession because of the backlog of investment in the booming mining industry. BHP, Rio Tinto and others are leading a huge growth in productive capacity; their aim is to supply minerals to China before they are beaten by Mongolia; which neighbours China. The goods news is that Australia can service the coastal provinces whilst Mongolia can service the inland provinces. There is likely to be a nice competitive spread of business for China.

The culmination of this boom is likely to be Australians travelling more with an ever-increasing dollar. One appealing travel destination is likely to be JAPAN. Why Japan? Several reasons:

1. Japan offers the cheapest property in Asia. Yes, surprising but true, and now is the perfect time to buy. Why? Japanese live in fear. And having just had a recession, they are not likely to be focused on investment. Demand is subdued after an increase in GST was announced.

2. Foreigners are allowed to buy property in Japan on a tourist visa. That is what I did - a 5bed dormitory 1hr from Tokyo for Y2.8mil ($US30,000). Cheap as chips. They are even cheaper if you buy in rural areas, which are subject to depopulation. But I wanted to be close to one of the most exciting cities in the world.

3. Jetstar and Air Asia X are racing to bring to the market increasing flights from Australia to 4 cities in Japan. I personally consider Tokyo and Fukuoka the best cities - for different reasons.

4. The appeal of travelling around the world for your summer. You need not leave your summer behind; you can chase your summer. Better still, if you are into skiing, you can chase your winters as well...just not at the same time. hehe.

5. Cultural shock. Japan is a great intro to a foreign culture. Its safe, its fascinating, its exciting, the food is amazing. Its high tech and invigorates the senses.

6. Travel is cheap if you are a tourist. Stay for 3 months before renewing your visa, whether you fly to HK or just extend. If you have the right job, you can do this easily. For more than 2 decades Japan has been offering foreigns a very generous travel pass - travel by shinkanzen (very fast trains) or local trains for $A300 for a week - unlimited. Cheaper for longer periods. I would get the shinkanzen to a remote part of Japan, then a local train to some mountain temple for lunch. The shinkanzen would get me home by dinner time. I save on accommodation costs.

7. Foreclosed property - best of all, you can buy foreclosed property like me, for a fraction of market value because of poor market sentiment and/or depopulation. Japanese people want to live in the 'expensive' city centre; but you can buy 12+ year old houses very cheaply in fringe areas for under Y4mil ($US 45,000). Its through the court system, so its safe.

8. Activities - Japan is great for campervanning, kayaking, canoeing, mountain biking and touring. I use the train network to go canoeing because many trains go up scenic isolated river systems. Of course, you can buy a cheap 7yr Toyota for $3000 (like my ex-partner did), or you can jump on a train with an inflatable as I did. The train network will get you anywhere.

9. Culture - Japan is a fascinating culture. I personally love connecting with foreigners and Japanese people in their gaijin districts. For many Japanese the place is insufferable...but that's because they accept all this pressure. I once had a conservation with a grandpa who wanted to commit suicide. He said 'I envy you"...being able to do whatever you want to do". This is the freedom we love in the West...but this generation never felt able to do it; some of their children are doing it. Which is why there are many Asians in Australia, USA, NZ living the dream. You don't have to remain in a dead-end job, you just need to have a flexible job like English teaching, tattooing, graphic design, programming, karate instruction. I know people who are teaching forex to Japanese people in English. Yes, they want to learn in English because they want to "kill two birds with one stone". 'Old Japanese Proverb' hehe. :)

10. Strategy - Develop a strategy for what you want to achieve. You can buy fringe city property, rural peoperty, skifield property, even property on islands. Yes, some countries place a high value on 'island property', in Japan, there is no such premium. In Australia, I pay a $150K premium to live within 400km of a city, in Japan, the distance is 1hr from a city or 5km from a train station. The dynamics are different...so you are never really isolated from the city. How much do I pay for my 1hr train ticket to inner city - just Y420. I ride a bike to the local shopping centre, grocery store, a plethora of bars, take-aways. My favourite is Hokka Hokka Tei...far better in Japan than their foreign franchises.

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Andrew Sheldon www.sheldonthinks.com

The performance of the Australian Labor Party in government

Achievements of the Australian Labor Party in government....read on.

1.. Carbon Tax – “There will be no carbon tax under the Government I lead.”

2.. Nation Broadband Network – $50 billion but no cost-benefit analysis

3.. Building the Education Revolution – The school halls fiasco

4.. Home Insulation Plan (Pink Batts) – Dumped after deaths and injuries

5. Citizens Assembly – Dumped

6.. Cash for Clunkers – Dumped

7.. Hospital Reform – Nothing

8.. Digital set-top boxes – Cheaper at Harvey Norman and now going obsolete

9.. Emissions Trading Scheme – Abandoned

10. Mining Tax – Continuing uncertainty for our miners

11. Livestock export ban to Indonesia – A massive over-reaction that decimated

the cattle industry and transport industry in Northern Australia

12. Detention Centres – Riots & massive cost blow-outs

13. East Timor ‘solution’ – Announced before agreed

14. Malaysia ‘solution’ – Scrapped because Malaysia is not a signatory to UN Human Rights Charter

15. Manus Island ‘solution’ – On the backburner

16.. Computers in Schools – $1.4 billion blow out; less than half delivered

17. Cutting Red Tape – 12,835 new regulations, only 58 repealed

18. Asia Pacific Community – Another expensive Rudd frolic. Going nowhere

19. Green Loans Program – Abandoned. Only 3.5% of promised loans delivered

20. Solar Homes & Communities plan – Shut down after $534 million blow out

21. Green Car Innovation Fund – Abandoned

22. Solar Credits Scheme – Scaled back

23. Green Start Program – Scrapped

24. Retooling for Climate Change Program – Abolished

25. Childcare Centres – Abandoned. 260 promised, only 38 delivered

26. Take a “meat axe”’ to the Public Service – 24,000 more public servants added

27. Murray Darling Basin Plan – back to the drawing board

28. 2020 Summit – Meaningless talkfest

29. Tax Summit – Deferred and downgraded

30. Population Policy – Sets no targets

31. Fuel Watch – Abandoned

32. Grocery Choice – Abandoned

33. $900 Stimulus cheques – Sent to dead people and overseas residents.

The majority spent on flat screen TV's and fast food.

34. Foreign Policy – In turmoil with Kevin (747) Rudd running riot flying around

the world spending more than the US Secretary of State

35. National Schools Solar Program – Closing two years early

36. Solar Hot Water Rebate – Abandoned

37. Oceanic Viking – Caved in

38. GP Super Clinics – 64 promised, only 11 operational

39. Defence Family Healthcare Clinics – 12 promised, none delivered

40. Trade Training Centres – 2650 promised, 70 operational

41. Bid for UN Security Council seat – An expensive Rudd frolic

42.. My School Website – Revamped but problems continue

43. National Curriculum – States in uproar - as they would be

44. Small Business Superannuation Clearing House – 99% of small businesses reject it

45. Indigenous Housing Program – way behind schedule

46. Rudd Bank – Went nowhere

47. Using cheap Chinese fabrics for Defense uniforms – Ditched

48. Innovation Ambassadors Program – junked

49. Six Submarines – none operational

50. Debt limit to be increased to $250 billion and rising – to pay for all of this and much more

Source: Email - much loved

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Andrew Sheldon www.sheldonthinks.com

Australian travel preferences and habits

There is an interesting story about Australian travel spending and international travel habits or preferences. It provides some insight into where people are spending their holidays. It appears Australia is out of favour; no doubt this is because of the greater budgetary pressures of the recession as well as the relatively high AUD. Mind you, the AUD is off 10% - down from 1.07 t0 97c to the USD. The general buoyancy of the AUD of course explains the foreign holidays for Australians. Spending big whilst the currency is high.

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Andrew Sheldon www.sheldonthinks.com

Australian property market - scary??

According to Harry Dent, the Australian property market 'could' halve in value - at least in overpriced areas like Sydney just like California because of the European debt crisis.

"In Sydney, the average house price is over nine times the average income, which is clearly unsustainable, Dent argues".

There are several problems with this story:

1. The probable correlation between a book sale and 'impending doom'....but I have not looked because I'm just cynical and its not a causal relationship anyway. You'd have to look at his arguments. Its possible that he's just ignorant.

2. Australia is in far better conditions than the United States

Australian debt is mostly private sector debt and its mostly underwritten by tangible assets - houses in areas where people want to live, and in a country which a great many people wish they could live. It is also a regulated property market, with government regulating land releases. The government is thus able to regulate prices by turning on the tap at two places - immigration or restriction of land supply. In contrast, Americans can move from a high demand centre like California to a low demand area like the fringes of Seattle or Sacramento and still keep a job. In Australia, you'd have to live 300km from Sydney to get cheap housing, i.e. Dunedoo or Taree. Yes, its extortion, but no one thinks of it like that.

The other big consideration is national income. Australia is well-positioned to supply commodities to the tiger nations of Asia, who are still growing at 5-10% per annum. We need to acknowledge that whilst the USA and Western nations are struggling, the developing world is undergoing an industrial revolution running at a faster pace than the one in the 1700s. The reason is clear - the absence or indifference to ineffectual regulation, and the impact of technology and structurally created cheap labour after decades of coercive statist government in this region. Look at Japan in the 1950s to 1970s; well China and India make a 20x bigger difference. US spending stimulated China; but rest assured that after an adjustment of say 5-7 years China will be making up for the foibles in the USA. Australia and Russia are in the best position to supply materials - relatively better than Brazil, Canada and South Africa. There are plans for mineral & energy investment in Australia of $750 billion - investments which could effectively double annual GDP. This is not going to occur overnight, but even if it takes 20 years, the capital inflows from China and elsewhere will be huge in itself, and for the 20mil people, it means more extortion. i.e. Immigrants will be ripped off as they pay full price for property. Except that will not care because they will have a job, and spare cash to send home to relatives in Asia.

This all means of course that Australia will have strong capital inflows and a strong dollar. Even if commodity prices or volumes come under some pressure, we need to appreciate that the Australian dollar will adjust accordingly. This market is secure. I think you can expect that governments will attempt to keep property prices stable, i.e. Expect property prices to move sideways for the next 10 years, or near so. With the Sydney market affordability index around 10x earnings - it is not going to fall, but with interest rates at low levels, I would not be expecting it to rise given the high levels of indebtedness and the return to conservative borrowing practices. This conservatism reflects foreign market factors rather than Australian considerations.

If you are considering buying a house in Australia; think again. You are buying into a political system based on extortion. If you do so, you simply need to find a rural town which is depopulating but finding work might be the greater concern. Try Taree, NSW or some of the wealthier rural towns based on cotton and beef. If you like beaches, try Grafton, maybe Kempsey (famous for its prison). Failing that; try NZ after renting for 5-10 years in Australia. In a decade, NZ will probably discover oil, and it will be as wealthy as Australia in relative terms. Of well, they live in hope, and its about as much as you can expect as well given the tyranny of majoritism.

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Andrew Sheldon www.sheldonthinks.com

In Australia - size matters!

Never mind the housing boom in Australia; here is another angle. Australia is on average building the biggest homes in the world.

According to CommSec chief economist Craig James, the reason is:

"Certainly it makes sense that Australia builds bigger homes than in other countries, given that population density is far smaller than in other parts of the world".

Actually that is too much of a generalisation; and a very inaccurate one. There are plenty of countries with adequate space; the US being a prime example. I would suggest a different motivation:

1. Australia has more Greeks than most countries, and they have a liking for Colosseum and other such grandiose architectural features that adhore the facade of monumental displays of egotistical pretense.

2. Australia has a great many mining millionaires who got rich publishing false drilling results or false quarterly reports; and then let's not forget they have friends besting them in other industries. That is why they are called 'besties'.

Australia might have the lowest population density, but most of that land is tied up in reserves for the sake of aborigines and fauna. In fact, Australia has among the most restrictive zoning regulation in the world - despite the paradox of vast lands - which go some way towards explaining the ridiculously high prices for land in the country. i.e. 500m2 some 100km north of Sydney will cost $US220,000; then add another $150,000 for the house. You'd have to wonder why coastline is so valued given the 14,000 odd beaches in the country, but we are all compelled by our need for services, if not our desire to live near water.

I frankly can't believe that the Chief Economist at Commonwealth Bank said that our houses are bigger because of our low population density. No Craig, its because local government will not allow us to subdivide our land. i.e. We need to protect the trees to preserve the green credentials of Sydney. But then listen further and you will hear more gaffs from Craig:

"Gen Y places less importance in home ownership than past generations, preferring to maximise life experiences".

This is nonsense of course. Yes, apartments do have their advantages in terms of city proximity, easy of renting; but most Australians simply buy apartments because they can only afford the exorbitant $320-400K price tag for an apartment compared to $500-750K for a house & land. That is why many are moving 100kms to the Central or South Coast where they can still afford a house. This is pretty ignorant for a 'Chief economist' at a major bank. Aren't banks in the lending business? I guess he is in the securities department. But then aren't banks supposed to know something about the economy? Apparently credentials at Comsec don't include an education. But then I gathered that when I used to trade securities with them. Serious acts of incompetence cost me a great deal of money.

I guess the last time the size of Australian houses was so large was during the 1880s gold boom.

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Andrew Sheldon www.sheldonthinks.com

Extortion in Australia - applied pragmatism

The Australian economy is of course faring well; but that is not to say a moral crisis is not impacting on Australia, as in other democracies. The popular resentment in of course against the major parties. There is of course a lot of angst with business. And to be fair, a great deal of 'big business' does involve some form of extortion. I cannot however bring myself to blame them for their pragmatic idiocy because they don't to be the 'moral agents' that politicians profess to be. After all, politics is 'applied morality'. Politicians enact laws; they decide the relationship between you and your neighbour; and they have a collectivised monopoly on the 'legitimate' use of force. There are types of applied force:

1. Initiation of force - such as forced taxation, subsidies using extorted wealth, unfair imprisonment without trial.

2. Force in defense or as a custodial measure, i.e. When the police protect people, or when govt regulation is intended to protect, as opposed to distorting markets to achieve some desired outcome.

The moral crisis becomes evident in the following article. About 10 years ago, Pat Corrigan and the National Farmers Federation used their collective financial muscle to break the unions who were using their labour union organisation to extort wealth from the shippers and taxpayers. Today, we have a different form of thuggery. We have a group of thugs 'encircling' Canberra. You might say they are there to protest. Well I say, why does a minority or majority matter? The debate should be not about physical extortion, but about the quality of ideas. Why does this become about 'numbers' or 'sacrifice' (as in the case of the protesters time, or the Indian currently on a hunger strike in that failing democracy). The problem with democracy is that its all about the wrong things. Its not about objectivity or ideas; its about the power of money and 'numbers'. We ought to be vetting the ideas of genius; not the thuggery of the mindless extorters who could bother less whether principles apply. They have concrete interests, and its mostly about protecting their previous privileges. Some of them might well be legitimate, but extortion doesn't make them any more righteous.

Globally about 10 democracies are currently in a state of crisis, whether central bank crises, debt crises, civil unrest. The one's I can think of are: UK, Ireland, Iceland, Italy, France, Greece, Spain, Portugal, USA, Japan and the Middle East. This is quite an array of democracies and authoritarian regimes. I would actually argue that democracy is an authoritarian regime. Why? Two reasons:

1. No objective standard of value - 'numbers, not reason'

2. No personal sovereignty - you are a means to some public (i.e. non-self end)

Any system developed on those terms is a tyranny because you have no choice, and you have no basis to achieve justice or accountability.

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Andrew Sheldon www.sheldonthinks.com

Wake up Australia! Gillard must go.

Have you noticed how quickly government goes off track when you have a collectivist running government. Picture this story:

1. Climate change is bad - so need to invest in solar. Huge sums given to fund programs, a great deal of misdirect of money, overpriced panels and installation, and unsustainable subsidies driving taxpayers into the ditch

2. Humanity intrinsic - Need to treat all people with dignity, even if they don't act with dignity. Need to encourage illegal immigration so not to offend sensitive humans with an intrinsic concept of human worth.

3. Climate change is bad - Killing of wild camels to reduce carbon (i.e. methane) emissions.

There is a value system here Australia. But do you think this is a good one. Do you think this is life affirming public policy? I don't think so for several reasons.

1. There is no clear evidence that humanity is detrimentally impacting the climate. This is conjecture at this point, and I'd say the arguments would quickly evaporate if more than 5% of the scientific population used their deductive, critical thinking capacity. Unfortunately, most of them are empiricists, who studied science because they could not make it into economics, or their values were corrupted by a poor education system, or their parents. We are sabotaging the economy, i.e. distorting human decision-making in order to preserve a lie; just as occurred with Vietnam, Iraq, children overboard, etc. Now we are being fed a rationalisation of climate change to kill camels. Next, expect a Liberal govt to use climate change as justification for nuclear. Frankly, I support nuclear, but for the right reasons.

2. The debate is populism: There is no informed debate on these issues. The mob is being manipulated by a Labor government in concert with lobbyists; probably some group inside the ABC who thought this is an issue to drive decision-making. It does not require a conspiracy; it requires an alliance of ignorance.

3. There is no accountability: Smart people are being alienated by a mob who controls government.

The intellectual decay in Australia is remarkable. The Liberals are just better; they are far from satisfactory. Australia - please start electing some Libertarians to at least control the balance of power. Just 10-15 of them, least we descend into anarchy. Frankly, that is probably a good thing. We need civil war as even the Libertarians cannot think. People might need to see the implications of stupidity. I might stay in the Philippines for the next decade. Australia's populism is reaching a new level of stupidity. The same type of stupidity that impacted Europe prior to WWII. Watch a nation be destroyed. It is no paradox that the nation never had it so good. Just 5% of the population produces 75% of exports. The nation never had it so easy. This is why you are all going to hell....well not hell...but a bad place. The looters and thugs are taking over. Gillard is the principal of their school of 'non-thought'.

Great rationalisation. Hopefully the animal & climate greens will cancel each other out. More worrisome is that they might mutate/breed. Fortunately they are so anti-conceptual, they will destroy each other over this concrete political issue, just like the Muslims and Christians in the Middle East. Ok, so they survived. The strategic question is whether they will be sufficiently weakened by their destructive actions. Unfortunately, objective intellectuals are a bit thin on the ground because of our crap education system.

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Andrew Sheldon www.sheldonthinks.com