Good. We encourage debate just don't feel it's a personal attack (I never have! ), just perspective.

The IMF definition of net external debt is here: http://en.wikipedia.org/wiki/External_debt

I can't find any data on how New Zealand compare to the UK, Ireland and Greece (on a per capita basis of course) on 90 day terms. Can you show us your data and sources?

I'm open to being swayed but I won't be swayed by hearsay or rumour, must be data.

The buggers have updated it since I got the data but the page is here: http://en.wikipedia.org/wiki/List_of..._external_debt

Must have been a spike because data for end of December 2010 is back down to 46% .

Right better to go to the source and the IMF data is here (net govt. debt as % of GDP).

2011 estimated data by the IMF:
NZ: 10.4%
UK: 75.1%
Ireland: 95.2%
Greece: 152.3%

suppose one key factor is what that debt is secured against?
With govt. bonds what happens at defaut? Do the bond holders get state assets? Or do the bonds become junk and not worth the paper they're printed on - more likely. Then the bond holders "take a haircut" as the analysts call it
Not sure what it is in the case of NZ's private debt. But I imagine plenty of that debt is secured against private rental, commercial and other property so it's less of a "bad" debt as there are assets that could be realised to pay off if the lender wants their dough back.....or am I being simplistic??

That is unless property is devalued. There is much talk at the moment about property in Oz and Nz being overvalued, and the scare mongers would have us believe that there will be a slump. Jury is out on that one. I suppose those who have property in the Christchurch region may face a negative equity situation - how are the property prices there?

IMO NZ housing stock is WELL overvalued. Inspite of having upgrading and spending much money on improvements on my house I still do not believe it is worth anything like the GV..my estimate is probably around $75k less than its GV. Which equates to a DIY devaluation of around 15%..even then I don't think that is enough of a correction.

One thing to remember about NZ private debt is that the majority of it is held with our banks. And remember it is Australia that owns them, I think guaranteed by their government, so I'm sure the Aussies won't be laughing if we do happen to get into trouble, which by all accounts, there is little prospect of anyway, at the moment

yeah "toxic debt" and 2008 crash springs to mind
IMO property and land values (other than some of the best farming land) are inflated in NZ due to all the reasons that are debated too often (consents, land banking, etc) so we could well have "re-adjustment" and whilst for some that would be a bad thing, IMO (again), I reckon in the long term it would be good and part of the modernisation of the investment market in NZ - i.e. away from property, property, property and towards something that works for "NZ Ltd" to make us all richer.

For me that ideal would be hight tech industry related to our production of food, timber, wool, etc using what we have plenty of in NZ: space, rainfall, renewable energy (sunlight/geothermal/wave), and Kiwi ingenuity.

having said what I said in the last post /obtuse hat on/.......... if it all goes to custard world-wide and food production collapses, the people rise up and the inevitable follows I think any real estate in NZ along with a Kiwi passport will be rather more valuable (in relative terms) than it is now. Here's hoping we never find out

Wouldn’t that come under “external debt”? By which measure we have less .

Yes but this is just a measure of net external debt obligations (as % GDP). All I’ve tried to do is separate out the public and private sector by using government figures and net external debt (respectively).

There hasn’t been a major problem with toxic debt here because the decline in real estate value has been slower than the UK/US. Also negative equity isn’t such a problem if unemployment stays low since people won’t generally declare bankruptcy while they can still pay their mortgage and our unemployment rate has remained relatively low compared to other countries (all of which I can supply figures to support if you’d like ).

That is view is not supported - the survey out this week has Manufacturers confident with where things are at, despite the currency.

Some positives regarding NZ's economic future are the fact that our major industries are extractive as opposed to services. Eg, Dairy, meat, agricultural products, timber, pulp and paper, oil and gas, tourism together these things form the major part of the NZ economy. This is a good thing because these things can not go anywhere, ie they cannot pick themselves up and move to another country.

On the other hand you have countries like the UK where services and manufacturing are dominant. Eg, financial services, IT services, engineering, manufacturing etc. These things are far more uncertain for the future of the UK economy as the balance of economic is shifting ever more eastward. The problem with these service and manufacturing industries is that countries in the east such as India, China and Korea are in effect leapfrogging the western countries such as the UK and US in that they are now offering high end services and manufacturing much cheaper than the western countries

I read recently that the UK will have to increase overall taxes by 12p in the pound for the next 50 years just to take care of it's aging population and avoid bankrupcy. But this will only make the UK even more uncompetitive in an increasingly competitive world. The UK banks will not put up with it and will leave as they have always threatened to do since the start of the financial crisis, the UK service and manufacturing industries will now have to compete on a global market with the like of the eastern "third world" countries and will also have to care for 10s of millions of baby boomers as they retire.

Therefore on a positive side, NZ may very well have a more stable economy to withstand any coming economic catastrophy in europe.

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