The figures for Oz did not look at all convincing, and Joe Hockey, true to form, looked and sounded decidedly less convincing than the figures....
Singapore-based Dredge says the current volatility in financial markets is in the early stage as markets react to a correction of global imbalances that will last 18 months to three years.
The global economy is made up of nations with a deficit of capital - the West - and those with a surplus of capital - the East and emerging markets, he explains.
"The flaw is that those with the surplus have all tied their currency to the main protagonist on the deficit side – the US."
"So monetary policy is determined by the deficit of capital side and flows through the currency linkage and you end up having some form or another of the same monetary policy on both sides with economies that are 180 [degrees] diametric to each other."
The financial links to easy-money policies in the US have unleashed a burst of credit expansion in emerging markets that has proved unsustainable and is now in the process of unwinding.
That is forcing a painful "market-induced tightening" that will impact the growth of emerging markets as credit expansion is halted and reverses.
The "simplest measure of these imbalances" is foreign exchange reserves which have swelled in the last few years but are now being liquidated, tightening financial conditions in emerging markets.
