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Our foreign net debt is now almost a trillion dollar (60% of gdp)

Discussion in 'Property Market Economics' started by TheSackedWiggle, 20th Jul, 2015.

  1. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    http://www.afr.com/news/economy/tra...n-australia-into-a-new-greece-20150719-gifyxh

    Our foreign net debt is now at almost a trillion dollar (60% of gdp)

    "The government in Canberra and the Reserve Bank of Australia had bet that depreciation in the value of the country's currency would help to offset the decline in its overbearing mining industry. However, that hasn't happened to the extent they would have wished. Although recent surveys of business confidence have been encouraging, outside mining the economy appears hopelessly weighted to the only other area of significant growth, real estate.

    The problem is that Australia, after decades of effort to diversify, is looking ever more like a petrodollar economy of the Middle East, but without the vast horde of foreign currency reserves to fall back on when commodity prices fall.

    Instead, Australians must borrow to maintain the standards of living that the country has become accustomed to, which even some Greeks will admit is unsustainable."
     
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  2. Pistonbroke

    Pistonbroke Well-Known Member

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    Provided that real estate doesn’t become 20% of gdp there's nothing to worry about with regards to a bubble and oversupply.
     
  3. jaybean

    jaybean Well-Known Member

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    Is it primarily good debt or bad debt?
     
  4. WestOz

    WestOz Well-Known Member

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    lol open question there, wait for responses...

    One consideration in WA would be if in favour of borrowing money to build more roads (without tolls) that don't necessarily reduce congestion vs using it for much needed efficient public transport (rail)
     
  5. Tekoz

    Tekoz Well-Known Member

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    As long as we have APRA, then it should be fine mate.

    APRA will take care of any issue in the financial and economic issue, plus I believe the big banks in Australia has already learnt from USA during the GFC period, so nothing will affect us.

    apart from the property price will keep on rising in Sydney slowly but sure.