The great property speculation game is over in America and Europe.  The music has stopped.

Forty years of steadily increasing pressure has been released.  Houses are worth a fraction of what people paid in better times, while the giant mortgages they took on remain.

Meanwhile, Australia parties on. 

We play the joyful hilarious game of musical chairs where everyone dances and dances, knowing in their hearts that someone will fall, wishing and hoping the ‘Greater Fool’ will be someone else before we go inside where mummy has sandwich corners and lashings of lemonade.

The rest of the world watches and smiles.  They know there is only one possible outcome; what they don’t know is when the Aussie bubble will break.

Global financial players learned a lot in the crashes overseas and they intend to fleece us mercilessly. Here are a few of the bets they will place against Australia:

*  Sell our banks. Our big four banks are stuffed to the gills with domestic mortgages.  Even moderate default levels would erase their profits, strain their balance sheets and load them up with unsellable houses.  Short selling into this yawning uncertainty will be as easy as shooting fish in a barrel.

*  Decline to renew our banks’ overseas borrowings except on the harshest terms – creating a liquidity crisis and bumping up interest rates.  Now, our banks are not silly and all have increased their liquidity, lengthened borrowings and broadened the borrowing currencies, but that merely delays the final reckoning – all rely on foreign money to fund domestic mortgages, some of which will never be repaid.

 *  Make low-ball offers to buy our best assets – Australia’s world-class mines, domestic monopolies and strategic real estate.  Some companies will have no choice but to take those offers, at great cost to shareholders and the economy.

The game of musical chairs has gone on longer in Australia for a number of reasons.  The sharp fall in interest rates was immediately transmitted through our floating rate mortgages to easier repayments.  And Mr Rudd’s First Home Vendors’ Boost led first home buyers – the most naïve, the most geared, the most exposed – to bid up prices.

 But the inescapable truth remains. One day very soon, the ‘Greater Fool’ will refuse to buy and real estate prices will turn down hard.

 It didn’t have to be like this. 

Successive federal governments have failed to introduce Land Tax – a powerful ‘automatic stabiliser’ – that would have deflected people’s energy from property speculation to more socially useful and economically productive investment.

They have preferred the vile GST on the food we eat and the clothes we wear, a tax that falls heavily on the poor. They have preferred Payroll Tax, a job-crushing blow for business.

We could remove 125 behavior distorting, expensive to collect and plain annoying taxes if we would only accept this single, fair and equitable measure.

Sign the petition!

The author holds ANZ shares