Budawang

Ouch, news just out that the UK's economy contracted much more the expected in the second quarter - down 0.7% following declines in the preceding two quarters.

Britain is in the midst of a decade or two of private debt de-leveraging which will see it move in and out of recession for most of that time thanks to the staggering level of private debt in the UK. A major default, on the scale of Lehman Brothers, is a distinct possibility unless something radical is done.

We're going to be seeing a lot more Britons trying to migrate here in the next few years.

http://www.telegraph.co.uk/finance/e...ock-0.7pc.html

mikelincs

Come on, let's face it ALL countries are in ecconomic difficulties, so why should people want to swap one crisis for another.

Budawang

Hmm, the Australian economy is currently growing at around 4%. We are in a far better situation than the UK. In the first quarter Australia's GDP increased by an annualised 4.3% versus the UK's decline of 0.8%. That's a huge divergence. The latest quarter is even worse for the UK.

http://www.smh.com.au/business/growt...606-1zvcf.html

http://www.tradingeconomics.com/gdp-...ist-by-country

ozzieeagle

I've been on my London Board since 2001... I'm seeing staunch Tory right wingers, City of London Exec types, putting forwards the view that NOW is the time to nationalise (as it's the only way out) the banks. This goes so against what they have always stood for that I'd say the shit is well and truly hitting the fan. It's the 0.8 pcts greed that has caused this apparently.

Very worried about anarchy in Spain and Greece.

Budawang

Well, those bankers, and their BoE cronies, are the prime culprits behind today's economic mess. However, you'd never know it from listening to them - instead the problem is public debt. What a joke. Private debt is orders of magnitude greater than public debt, but you never hear it even mentioned by neo-classical economists. Now everyone is trying to pay down their mountains of debt. Meanwhile banks, companies and wealthy individuals are sitting on mountains of cash which they won't lend. What you have is debt deflation which could take two decades to work its way through before we have healthy debt levels again. Meanwhile the UK economy will be trashed.

commonwealth

don't let Mr Chris read this!

bingobob777

Why?

Unless you work in mining or engineering there's sod all here either.

Zen10

Agreed, but Australian private debt levels are eye-watering. Eventually, the chickens are coming home to roost in Aus as well. You're right about more people trying to leave Britain - in fact all of Europe is going to start losing people as their economies contract. External debt as % of GDP is still "only" 98% in Australia, compared to 360% of GDP in the UK though.

commonwealth

i work in neither mining nor engineering but i'm not feeling any aussie 'recession'.

Zen10

You know, neither are a lot of people in the UK either. I think this is just because you don't see the unemployment lines in the age of electronic transfers. There are signs of a slowdown in Australia though - I read about 700 mining jobs being cut somewhere (maybe Qld) and I know they just cut nearly 200 jobs in the wine industry in SA. That's nearly 1000 in a week.

bingobob777

didn't say there was, I just said that unless you work in one of those industries then a life in extortionate Australia is unlikely to be any better than the UK.

In fact in June 2012 the unemployment rate went up in Australia but down in the UK.

Zen10

I agree Australia is expensive - but don't you think wages are higher? I find positions like-for-like with UK are much better paid in Australia so it evens out.

bingobob777

yeh in some industries, I make 4 times my UK salary here because I work in an in demand industry. However for hairdressers, shop assistants, policemen, secretaries then I think the salary v cost of living is the same.

Budawang

The fundamentals of the Australian are far better though. Glenn Stevens gave an illuminating speech yesterday. Reserve Bank governors are notorious for being understated for obvious reasons, but he was quite direct about the relative strengths of the Australian economy:

"It is slowly becoming better recognised that the Australian economy's relative performance, against a very turbulent international background, has been remarkably good. Many foreign visitors to Australia comment on this relative success and I have noticed an increase in the number of foreign companies interested in investing in Australia as a result, notwithstanding our domestic tendency towards the ‘glass half empty’ view."

He provided a chart of GDP growth since 2005 and there is daylight between Australia and other advanced economies, with the UK at the bottom, even lower than the Euro area.

The full speech is here:

http://www.rba.gov.au/speeches/2012/sp-gov-240712.html

Zen10

The slowdown in China will affect Australia though, no mistake, Mining is too big in the economy for the whole thing not to take a hit. I worry about Australia becoming addicted to easy money from selling rocks to China, basically.