The Automatic Earth's list of assumptions

I don't like reposting other people's stuff generally, but this list from Stoneleigh is worth a glance. For Australia the emphasis will differ, but the fundamentals are the same. Also TAE reposts others' stuff endlessly (how do they get away with it?).

How will our situation in Australia differ? We are much more tribal and communal than the Americans. I think our publicly owned facilities (public transport, government services) will stagger on for much longer. Our leaders are seen as managers rather than elected kings, so we expect less from them. There are many other subtle but important differences which will change our diverse fates! But the overall fate of industrial society is written…

Stoneleigh: People have been asking how we see the future unfold. In case you wonder what we stand for, much of our view of what's to come can be found in the primers on the right-hand side bar [check their site]. Here is an additional brief summary (in no particular order and not meant to be exhaustive) of the ground we have consistently covered here at TAE over the last year and a half, and before that elsewhere.

1. Deflation is inevitable due to Ponzi dynamics (see From the Top of the Great Pyramid)
   
2. The collapse of credit will crash the money supply as credit is the vast majority of the effective money supply
   
3. Cash will be king for a long time
   
4. Printing one's way out of deflation is impossible as printing cannot keep pace with credit destruction (the net effect is contraction)
   
5. Debt will become a millstone around people's necks and bankruptcy will no longer be possible at some point
   
6. In the future the consequences of unpayable debt could include indentured servitude, debtor's prison or being drummed into the military
   
7. Early withdrawls from pension plans will be prevented and almost all pension plans will eventually default
   
8. We will see a systemic banking crisis that will result in bank runs and the loss of savings
   
9. Prices will fall across the board as purchasing power collapses
   
10. Real estate prices are likely to fall by at least 90% on average (with local variation)
    
11. The essentials will see relative price support as a much larger percentage of a much smaller money supply chases them
    
12. We are headed eventually for a bond market dislocation where nominal interest rates will shoot up into the double digits
    
13. Real interest rates will be even higher (the nominal rate minus negative inflation)
    
14. This will cause a tsunami of debt default which is highly deflationary
    
15. Government spending (all levels) will be slashed, with loss of entitlements and inability to maintain infrastructure
    
16. Finance rules will be changed at will and changes applied retroactively (eg short selling will be banned, loans will be called in at some point)
    
17. Centralized services (water, electricity, gas, education, garbage pick-up, snow-removal etc) will become unreliable and of much lower quality, or may be eliminated entirely
    
18. Suburbia is a trap due to its dependence on these services and cheap energy for transport
    
19. People with essentially no purchasing power will be living in a pay-as-you-go world
    
20. Modern healthcare will be largely unavailable and informal care will generally be very basic
    
21. Universities will go out of business as no one will be able to afford to attend
    
22. Cash hoarding will continue to reduce the velocity of money, amplifying the effect of deflation
    
23. The US dollar will continue to rise for quite a while on a flight to safety and as dollar-denominated debt deflates
    
24. Eventually the dollar will collapse, but that time is not now (and a falling dollar does not mean an expanding money supply, ie inflation)
    
25. Deflation and depression are mutually reinforcing in a positive feedback spiral, so both are likely to be protracted
    
26. There should be no lasting market bottom until at least the middle of the next decade, and even then the depression won't be over
    
27. Much capital will be revealed as having been converted to waste during the cheap energy/cheap credit years
    
28. Export markets will collapse with global trade and exporting countries will be hit very hard
    
29. Herding behaviour is the foundation of markets
    
30. The flip side of the manic optimism we saw in the bubble years will be persistent pessimism, risk aversion, anger, scapegoating, recrimination, violence and the election of dangerous populist extremists
    
31. A sense of common humanity will be lost as foreigners and those who are different are demonized
    
32. There will be war in the labour markets as unempoyment skyrockets and wages and benefits are slashed
    
33. We are headed for resource wars, which will result in much resource and infrastructure destruction
    
34. Energy prices are first affected by demand collapse, then supply collapse, so that prices first fall and then rise enormously
    
35. Ordinary people are unlikely to be able to afford oil products AT ALL within 5 years
    
36. Hard limits to capital and energy will greatly reduce socioeconomic complexity (see Tainter)
    
37. Political structures exist to concentrate wealth at the centre at the expense of the periphery, and this happens at all scales simultaneously
    
38. Taxation will rise substantially as the domestic population is squeezed in order for the elite to partially make up for the loss of the ability to pick the pockets of the whole world through globalization
    
39. Repressive political structures will arise, with much greater use of police state methods and a drastic reduction of freedom
    
40. The rule of law will replaced by the politics of the personal and an economy of favours (ie endemic corruption)