Australia - the lucky country...really?

http://www.marketwatch.com/story/australia-facing-a-hard-landing-andy-xie-2012-10-25?pagenumber=1

And Xie has got it right - the timing is the only question.
Those inside the bubble can't see it...2013 may be a little too early...but if this was a debt supercyle, why do Australians, with their love affair with debt fuelled housing think they can survive it's conclusion? They can't.


Any foreign capital-inspired asset bubble bursts when the flow reverses. It causes the monetary system to contract. As the central bank replaces the outflow with new money, the currency value drops, which frightens Asian retail investors who hold Australian dollar deposits. Their flight causes the currency to tank more and liquidity to tighten.

The property market will fall with the tightening liquidity and capital flight, which frightens away more foreign capital in the property market. The new equilibrium is defined by a much lower currency value and property price. In this new equilibrium, the currency value could be half of its peak value.