The RBA said yesterday assets have fallen by $40,000 per household in the last year.

No wonder everyone is now saving over ten percent of their incomes and slashing mortgage balances with grim determination.

The economy, which usually steers like an oil tanker, has turned on a dime.

We were spending about 103 per cent of incomes, pinching off some of the strong rises in home prices and balancing this with borrowings.

What happened? Falling land prices.

The ABS says house prices are down nationwide by a mere 4.8 per cent (ABS). This is the result.

We all have a personal balance sheet. It might exist only in our heads, but it exists nonetheless. Asset price falls come straight off our personal equity, our savings, while liabilities – mainly the home mortgage – are payable in full with interest from after-tax incomes.

Returning to – overshooting – the long-term average land price is going to be quite an experience for anyone with big borrowings. The impersonal forces that provided ‘Free Deposits’ for housing upgrades are now issuing ‘Underwater Coupons’ to anyone foolish enough to be long and geared into the Australian real estate market. Boomer balance sheets suddenly look quite different, and they simply do not have enough working years left to restore their finances.

The unshakable determination of the MSM and politico-housing complex to maintain citizen ‘confidence’ with deliberately misleading anecdotal narratives has given people false hope. They should be jailed for the tremendous economic damage they have done.

This unfolding financial catastrophe need never have happened. Perhaps it takes a crisis to remind citizens what really matters in a modern and dynamic economy: social justice and economic efficiency. Change the tax system to remove the incentives to speculate and structure it to encourage labor and business enterprise instead. We have the blueprint – the Henry Review. All we need is a government with the political will to carry it out.