So, then, what does that say about a commodity based economy such as Australia.
Locally: 1) foreign debt out of control; 2) BoP deficit rapidly approaching 7% of GDP; 3) local GDP flat (0.2% in March Quarter, and likely 0% to negative in June quarter, with only the prospect of the $600 family bonus payment to reverse that outlook); 4) a currency under siege without relief (remember, an A$ above 64c is decidely negative to our export sector); 5) exports now performing at their worst proportional level since 1990; 6) consumer spending far worse than the equivalent in the USA; 7) proportional debt in Australia greater than should otherwise be the case and quite possibly far worse than is the case in the USA; 8) our foreign debt now exceeds 50% of GDP (actually, closer to 60%); 9) our level of savings below that of the USA, the UK and Europe; 10) our "real" interest rates are amongst the highest in the developed world (even worse, on a nominal rates basis); 11) our level of energy (read - "oil") dependency is far greater than that of the USA (within several years, we will be importing >90% of our oil requirements); 12) a flight to safety in the event of Mark Latham being elected is likely to see a capital crunch in Australia with foreign funds being withdrawn from Australia; 13) the removal of NCP from the Australian Indices will see a marked exodus of foreign funds from Australia resulting in the ASX being further relegated down the ranks of the world's recognised stock exchanges; 14) the A$ increasingly assuming the status of a speculative currency without any safe haven status (especially if Mark Latham gets elected); 15) a local economy heading for a U-turn in the not too distant future.
So, whatever, the fate of the US economy, the Australian fate is far, far worse. That's the problem really. Most on this Board contend that the US economy is a disaster but ignore altogether the rapidly emerging disaster in their own backyard.
