Bubble at bursting point?

And you thought inflation and the pace of change was bad in Australia. Try this one for size.

On a recent trip to California's Silicon Valley and the Bay Area, one unnamed ARN informant managed to take the time to let us know what we've been observing and saying for years.

"I have to write to you all just to let you know the current US experience:

"No hotels room vacant in 6000 square miles in and around the Bay Area. Entire Bay Area rental cars are fully booked (about 65,000). Every restaurant, every night, booked out. No domestic flights in or out less than 99 per cent full. Five lane freeways packed in peak hour 6am to 8pm (14 hours). Mobile network capacity has doubled every year for the last four.

"A colleague got an incomplete hotel room (new hotel, unpainted, no TV or phone) for $US325/night - yes, over $600 Aussie. It was a crap hotel too. And here is the clincher: 30 per cent of businesses yet to make a profit. A three bedroom house in Los Gatos starts at $US9m (a nice area though). The place is bursting at the seams. There is absolutely zero capacity left for anything else.

"Sooner or later this bubble has to burst.

"It is the industrial revolution over 50 years packed into about two or three. Only most of the people are dumb Americans motivated by greed and the fear of not being seen to be successful.

You've got to understand how good we have it in Australia."

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