Zen10

I don't think so. UK Treasury figures (2011) show private debt to GDP ratio of something like 450%.

http://cdn.hm-treasury.gov.uk/2011budget_chapter1.pdf

The article you have here says Australia's is 180% private debt to GDP. UK has much higher debt according to these two sources.

450% of GDP really IS unbelievable, but I find I can believe 180%. Britain's was around there in 1991.

snowbunny

Why less pessimistic about the US than about Europe? Okay, we (the US) have more land and a lower population density, but we still have stiff competition from countries with low labour costs. Agriculture seemed promising until the droughts have hit.

Canada is best poised IMHO to suffer fewer shrinking pains - relatively low population, loads of land and LOADS of natural resources, along with a consumer base that shuns debt.

commonwealth

AU household debt is almost at par with UK but as we all know households in AU have been deleveraging since then that's why retailers are suffering and banks are having problems growing their loan books.

Debt per se is not a problem if you can repay it and gain from it through leverage.

Zen10

I agree about Canada yes, which is in a similar position to Australia. US slowing down now, but less pessimistic because it has one control centre and is one nation-state so there is more confidence in its ability to get out of trouble.

rugbymatt

I am loving the pissing in the corner at who owes more, who is in the deepest shit etc. We are ALL in the shit, Australia is coping because its got plenty of natural resources, just like Russia but if the rest of the world hits a real depression (by the way, I don't believe we in the UK are anywhere near that) then who is going to buy those resources? If China stutters because the West can't buy anything anymore do you honestly think that it will keep propping up Australia?

We need a change, without that we will never be out of the mess we are in.

commonwealth

relativity is the keyword.

Budawang

The Japan/UK comparison is very interesting. Japan started deleveraging 20 years ago. While their economy experienced very low growth during that time, Japan also had a strong, globally competitive manufacturing export sector. Households were saving like crazy (helping to fund spendthrift westerners so they could buy Japanese goods) while the Japanese government counterbalanced this by spending like crazy which kept unemployment in check and maintained social cohesion. Japan has basically gone sideways over the last 20 years by swapping its private debt problem for a public debt problem.

Britain's current situation is worse that Japan's. It's not a globally competitive manufacturing powerhouse. Its main trading partners are also in the dog house. Its economy is dominated by the finance sector which has huge liabilities. And it doesn't have Japan's social cohesion.

All sectors of the British economy are trying to deleverage simultaneously which can only result in falling purchasing power as demand is stifled. Perhaps the most worrying statistic is that, despite a couple of years of economy-wide austerity, Britain's debt to GDP ratio has remained largely unchanged as its GDP shrinks as fast as its debt levels. The Downing Street clowns and City gangsters current policy trajectory is totally unsustainable.

commonwealth

The difference is that Japan has a strong export sector, and its citizens have high savings which are largely funding the bonds issued by the Japanese government.

chris955

It is funny I must admit, equally when someone says how the Australian economy is booming but at the same time they have their fingers in their ears and letting out a loud lah lah lah can't hear you. As I have said whatever helps people sleep at night I guess.

Beaverstate

Droughts come and go, check out the 1930's dust bowl. One or two drought years does not mean a new normal. If the part of the world turning their noses up at drought resistant (GM CROPS) get hungry enough, part of the problem will lessen.

Zen10

And to rugbymatt also

Just speaking for myself, I am not making the case that Australia is safe, and never have done. My observation is that the UK is in significant trouble at the moment, much more than is generally discussed in the MSM, and that for very simple reasons (low pop & lots of resources) Australia and Canada are relatively safe. Relatively. I've posted here that I think Aus will have a recession at some point due to slowdown in Asia.

I hate stupid games of ping pong people on forums sometimes play. I write something hinting that UK is in poor shape and immediately I get a response demonstrating that Australia is worse, etc. So what?? Both countries are equally important to me and I want both to pull through and do well. As difficult as it is I must admit to myself that the UK is in much worse shape.

Zen10

Think about what all that money-printing achieved. That tells a story. Unprecedented inflationary force like that.

Budawang

The banks are not lending the vast sums of free money given to them. Some of it they're using to inflate the Aussie dollar like a Michelin tyre man and speculating on commodity prices. What they're not doing with this free money is what they were supposed to do and that's lend it to beleaguered British consumers and businesses. No nobel prizes for guessing why they aren't doing this - because those consumers and businesses already have too much debt.

Money printing is creating commodity price inflation which is making Australians richer and richer. Nominal GDP per capita according to my calculations is now almost double that of the UK. Thank you Mr Cameron and Mr Osborne! My European holiday later the month is getting cheaper and cheaper.

This is economic madness all in the name of protecting their banker mates from the haircut they have to (and eventually will) have.

commonwealth

Australia has the highest nominal GDP per capita among G20 countries.
Followed by Canada and the USA.

and 2nd highest using purchasing power parity $, after the USA.

Country USD PPP
Australia 65,477 40,836
Canada 50,436 40,457
United States 48,386 48,386
Japan 45,920 34,362
France 44,008 35,048
Germany 43,742 37,935
United Kingdom 38,592 35,974
Italy 36,267 30,165
European Union 35,742 31,548
South Korea 22,778 31,753

moneypenny20

Has anyone said anything new in the past week? No, I'll go away again then. Keep up the good work.