In 1966, Australia split from the UK pound at a 2:1 ratio as Australia moved to its own local currency.
Every 1 Australian Pound converted to $2 Australian dollars.
Psychologically, Australians thought they received a 100% pay rise.
This move was in fact detrimental and contributed to the reason real estate ratios went from 3:1 to 10:1 today.
Between 1966 and 1976, there were a few factors to consider as to why wage growth went parabolic:
1⃣ Psychology: Australians had magically increased their wages by 2x in 1966, so the demand for pay rises in subsequent years were faught for.
2⃣ The US removed the gold standard in 1971, so countries started to print fiat money and rapidly increased inflation.
3⃣ Equal Pay Reforms were between 1969 and 1972.
4⃣ Australia was establishing itself as a trade giant with Iron ore, natural gas, coal and much more.
Then in 1978 we see PEAK wage growth, and falling ever since.
Real Estate boomers from the 1970s, 80s and 90s built property portfolios because their wage growth was in line with inflation.
However from the year 2000, for the first time since 1940, Australia's wage growth was below 4% and below the inflation expansion of money supply.
Here is why real estate is unaffordable for young Australians. You've been priced out.
If your wage growth is less than inflation, there are a few things you can do:
Work harder, work longer, or upskill and find a better job. Who's happy with that?
Bitcoin could be one of the ONLY assets that will help you buy a home in the future as it beats inflation every year, PLUS generates wealth far greater than the inflationary number.
Block number 912632
Congratulations Jedi! 3.147 Bitcoin for your proof of work and energy contribution to the network.
