It has been so long since the last recession 1990-91 that anyone who experienced it in business or the workforce is an old white guy – they are at best in their late 40’s and the beard sprouts grey.

Let me give you some human insights, hipsters.

Recession is like drought – a money drought. Every morning, people look up to cloud-less skies and know there would be no relief. No one spends a cent, and if they do it is to pay down debt.

All non-essential activities are dispensed with. Every work practice is reviewed, to the horror of those whose entire career is abruptly deemed ‘non-core’ and consigned to the scrap-heap. Brand-name products are an indulgence. Stunning home renovations give way to a DIY paintbrush to pass the time. We still fill petrol, while cursing the V8 vanity and vow to buy a frugal four next time and forevermore.

And like in a drought where mature sturdy trees that shape the landscape give up and suddenly die, long established firms just vanish. Fortunes are made by those who can foresee which ones. They are criticised for it, because no one, repeat, no one else is making a cent and living standards fall further with every sun up.

Anyone owed money terrorises debtors to bring forward payment by even a few days. They are surprisingly insistent. This isn’t to save overdraft interest, this is for employer solvency and job survival. Cash flow really, really matters.

But Australia’s economic trends and data do not point to a mere recession. They suggest an entirely domestically-created, self-inflicted depression. The level of bad (consumer) debt is now so high, if we remove those we know live debt-free, most of the remainder must have promised away their entire working lives for debt to buy consumption assets – mainly the family home.

While Treasurer Hockey is vigorously pointing to modestly positive GDP figures, unfortunately our personal incomes – real net national disposable income per capita – are actually falling and have been since 2011.

Oz real net national disposable income per capita

Depression is recession repeated. The unpleasant conditions in 1990-91 lasted a mere 18 months – it felt like forever. I foresee 3 to 5 years of grinding retreat with falling house prices, widespread retrenchment and personal bankruptcies.

Those with big debt will curse the day they succumbed to the siren song of the banksters and will emerge from depression so scarred and debt-averse they will never ever borrow again, like the Silent generation shaped by the 1930’s depression.

Sure, we now have social security and an array of automatic stabilizers, but the personal debt levels are stunningly higher too.

I am often scolded by property bulls as a doom and gloom deadbeat. Harsh times are coming, the cause is prayers of greed, not calls for caution.

Don’t Buy Now!