January 21 will be remembered in Australia for more than Barack Obama’s inauguration as the 44th US President.

It was also the day that the first large scale retrenchments of the global economic crisis hit Australia.

The mining giant, BHP-Billiton announced that it would put off 6,000 jobs world-wide, including 3,300 in Australia.

The Treasurer, Wayne Swan, said:”What we’ve seen today is a sober reminder of the unwinding of the mining boom.”

The repercussions of these – and thousands of other job cuts to come – will be enormous.

As we have said before, most Australian families are not well prepared for the sudden collapse  that has now hit the national economy.

Debts are high and savings are low.

Thzt’s what happens when families struggle to get homes in property booms, while house prices, interest rates and petrol prices are sky high.

The Reserve Bank knows all this only too well.

It reports, for example, that the average Australian family’s housing debt to housing asset ratio stood at 28.9 per cent last September, when the global economic crisis struck. That was up from just 8.8 per cent, a generation ago, in 1977.

The miners, who have just been put retrenched, have a big stake in all this.

Many years ago, when the Pilbara iron ore operations were still in their infancy -and your correspondent was industrial reporter on a West Australian newspaper – a big miner, which will remain nameless, invited him to lunch more than once, to meet  its Japanese buyers.

After some polite lunchtime conversation, the buyers would always ask the same question.  “Are there Communists in the Pilbara?”

The question was understandable. The miners did go on strike, quite often, back then.

But I would reply, quite honestly that they weren’t.  “They are all little capitalists, who have gone north hoping to save for a deposit on a house,” I would explain.  “But when they get there, they work very long hours, in extreme heat and often get grumpy and unreasonable.”

The hours have been reduced since then.  And their working conditionsnow are much more reasonable.

But most young miners are still hoping to save for – or pay off a house – somewhere in the suburbs.

Those who  have just been sacked must now revise their plans, urgently.

But the trouble won’t stop there.

Indeed,  the second-round impact of these – and future – sackings will be  very dangerous, not only for those directly involved, but for Australia’s banks and the entire economy, as well.

House prices could collapse here, too, as they have in America, if too many houses are repossessed and put up for resale on a bad market.

People who are out of work don’t pay taxes, either.

But they do claim unemployment benefits.

So the Federal government, too,  stands to lose heavily out of all this.

It will take more than just a few Federal deficits to correct this grim situation.