National debt to reach $1 trillion

[paulv]

I didnt predict - I answered a question.

The predictions were made 18 months ago, and I have the bonus cheque nicely cashed.

 

Well done to you sir, maybe you should invest in a utility room - airing your laundry in public is considered quite vulgar in certain circles :cute:

[Guest gratom]

I've said for some time that we stood on the edge of a new Great Depression and that it came in two parts[see Lukesk' above] housing prices[Oz etc ]are a manifestation of a delusion which seems almost worldwide.Are we watching the slow enactment of part two??--please hope that I am wrong the consequences don't bear thinking about.But I will stick with my dark-horse thesis--it will be the totally unexpected that will push the world economy over the edge[for example Nrth Korea in a fit of desperation invading the south]

[Guest LukeSkywalker]

I've said for some time that we stood on the edge of a new Great Depression and that it came in two parts[see Lukesk' above] housing prices[Oz etc ]are a manifestation of a delusion which seems almost worldwide.Are we watching the slow enactment of part two??--please hope that I am wrong the consequences don't bear thinking about.But I will stick with my dark-horse thesis--it will be the totally unexpected that will push the world economy over the edge[for example Nrth Korea in a fit of desperation invading the south]

 

Yes, I would agree. We are on the verge. Like you I hope to God that it doesnt happen.

 

I was wondering though if rather than a war it may be something far simpler like natural catastrophy?

 

I mean the volcano (which seemingly is popping up again) causing total chaos for months or the oil fiasco causing BPs price to plunge etc etc?

 

Again, personal opinion, we need a sensible coalition to give the country (this and others) momentum to try and control whats happening. Unless it cant be controlled (which is a possibility).

 

Either way the world as a whole needs to start thinking in a much more co-operative way. Meanwhile, we just have to live our lives.

[sgperry]

I know this is off topic but given all the doom and gloom being projected by Luke "its not that bad, you should see the size of my bonus" Skywalker.

 

Markets like to talk in terms of doom and gloom (and then mop up large profits somehow when things aren't as bad as they say they will be). Funny that.

 

Gee, it was only around 6 months ago that people were saying the UK would be lucky to escape recession by now unless Brown resigned at easter, that house prices would continue to fall, unemployment go up, the pound be worth about 5 cents etc etc. Actually, its pretty much been the opposite from what I can gather.

 

All I can say is that :

 

- no one REALLY knows what will happen post election (both here and in Aust) re the economy (UK, global, Aust)

 

- anyone who thinks they know is probably trying to profit by telling everyone else what they "know" (or, like Goldman, supposedly betting both ways)

 

- the likelihood of a hung parliament in the UK has already been priced in to sterling

 

So, tomorrow, people in the UK should vote how they wish to - its your vote, use it as you think best (as a local vote, a protest vote, a tactical vote, whatever).

 

Don't be swayed by what the market is trying to tell you to do. Or act in panic because of what those "in the know" say will happen if a certain party was to get in.

[Guest Yorkshirelad1975]

The article states the Australian National Debt could reach $1 trillion within a decade (ie 10 YEARS) - based on a mishmash of wild worst case assumptions which are way off the mark. The current debt is manageable and Australia is definitely one of the best managed economies around... Don't forget it was running at a surplus just 3 years ago until Rudd started spending everything and trying to pass silly mining taxes

 

Having said that i agree that things in europe and china are truly scary and to me it appears just a matter of time until Australia gets dragged into the mire too. There is no way Greece can pay back the rescue package and next at the beggars door will be portugal, spain and ireland. I strongly doubt the Euro countries can afford to bail them all out so the only real option will be for countries to default on debt , remove themselves from the euro and reinvent their own currencies. What this means is absolute desolation to the euro zone and debt imparements to the already destroyed euro/US banking sectors which will be a merry go round as someone then needs to bail them out. The only glimmer/positive for Australia is that its exposure to debt in the euro zone for the big 4 banks was only 2 or 3% of lendings hence won't have a tangible effect on the Australian economy. From memory its banks are actually the least exposed country to Europe debt across all the G20.

 

However (and here comes the big BUT)........... the chinese property bubble is a different matter and i believe in early 2011 will feed through the australian resources sector and ultimately cause hardship / recession and house price bubble to pop in a big nasty mess. Australia will definitely suffer, and many familes will suffer severe hardship. However , Australia will still come out of this better than Euro countries as demand based commodity driven economies will easily outpace debt infested non producing eurozone countries. As for United Kingdom.... i think it will come out of this stronger than any country in Europe due to having the luxury of being able to devalue the pound, but as for when this will happen, it could be years away.

 

Interesting and scary times ahead !

[Guest LukeSkywalker]

Gee, it was only around 6 months ago that people were saying the UK would be lucky to escape recession by now unless Brown resigned at easter, that house prices would continue to fall, unemployment go up, the pound be worth about 5 cents etc etc. Actually, its pretty much been the opposite from what I can gather.

 

All I can say is that :

 

- no one REALLY knows what will happen post election (both here and in Aust) re the economy (UK, global, Aust)

 

- anyone who thinks they know is probably trying to profit by telling everyone else what they "know" (or, like Goldman, supposedly betting both ways)

 

- the likelihood of a hung parliament in the UK has already been priced in to sterling

 

So, tomorrow, people in the UK should vote how they wish to - its your vote, use it as you think best (as a local vote, a protest vote, a tactical vote, whatever).

 

Don't be swayed by what the market is trying to tell you to do. Or act in panic because of what those "in the know" say will happen if a certain party was to get in.

 

I agree with the second half of your post apart from tactical voting.

 

Nobody does know what will happen in the economy - but the entire thrust of Browns campaign has been "the Tories will ruin the recovery" - simply a guess on his hapless "I'll mortgage your kids future" behalf. Amused me yesterday to hear him saying "a creer in business is not for me". WTF? Who would employ him?

 

The first part .....

 

Its debatable that the UK is properly out of recession. Limping along at best.

 

Unemployment is rising - but measured differently to 20 years ago (statistics and all that). The percentage of non-working but work capable is the highest ever. Kids stay in school to avoid being unemployed etc.

 

House prices outside of pockets in London are not rising, they are stable at best.

 

The pound has lost significant value against the AUD/$ (and the Euro until the last little ripple from Greece). But yes, a hung parliament is probably close to fully factored in.

 

None of this is: "pretty much been the opposite" of what was forecast.

 

BUT in all honesty - whoever gets in, it doesnt really matter to the bulk of people. The wealthy will avoid new taxes. The poor will be screwed over. Nobody will tackle the big issues. As they said in Russia about the end of Communism "the only thing that changed was the colour on the hats".

[Guest gratom]

Find myself more in agreement with Yorkshirelad 1975--an all round view from all--seems to be we are in the mire and what is just around the corner is going to be thoroughly unpleasant.Though I do think the Oz economy is much more exposed than Yorkshirelad believes--after all if china goes down the pan who is going to buy the iron ore etc[a trifle simplistic I know but a leading question]

[Guest Yorkshirelad1975]

It's not a question of will we enter the mire, but how deep we will get into it. --Gratom-- i do agree with you that Australia will be affected significantly and China are stockpiling iron ore and commodities already so they have a ready made buffer. My point is that the euro zone would be mortally wounded with potentially decades until full recovery wheras Australia would fall in a heap , dust itself off and sooner or later the commodity trades would improve and growth would return. What industry does the eurozone (or indeed UK) have that will bring growth? They are heavily service (should i say 'government employed') and financial based economies with limited manufacturing base (excluding Germany) and hence have very little end product to sell to get out of this mess. If i were Germany , in all honesty, i would reject the Greek bailout and be the first country to leave the euro to catch the rest offguard. I suspect the German people would love this move and it would be the death nail for the poorer cousins all across europe. It won't happen, but just my thoughts!

 

Also i honestly dont understand how the world can continue supporting larger population as state pensions/superannuation is just a ponzi scheme due to fall in a heap. I suspect that by 2050 the retirement age will be nearer 75. How else can governments support the increasingly aged population.... What a scary world we live in!

[Guest gratom]

I read somewhere that the UK remains the sixth largest manufacturing economy in the world--this is admittedly much down on what it used to be.As for your points concerning Germany and bailouts--agreed.

[fleabo]

I read somewhere that the UK remains the sixth largest manufacturing economy in the world--this is admittedly much down on what it used to be.As for your points concerning Germany and bailouts--agreed.

 

Yes - I think 6th - behind Italy I seem to remember.:err:

[fish.01]

It's funny because we keep hearing how people can't wait to get over here to escape the sinking ship that is the UK with it's terrible debt, one poster in particular refers to it as the next Greece. I don't know about the housing bubble, more like the reality bubble.

 

The recent talk of a debt crisis in the UK has been because of the level of UK government debt. As you probably know the government debt levels in the UK are very high (> 60% of GDP heading towards 79%?), they are much lower in Australia (~11% of GDP heading towards 14%).

 

This article has uk government debt worse than greece? http://news.ph.msn.com/business/article.aspx?cp-documentid=4070070

 

Lucky the UK can print money and devalue the currency.

 

I think total private debt is a problem in both countries. Is it not symptomatic of the way our monetary system is setup though. Total private debt must go up otherwise it all crashes?

[Guest chris955]

Actually that isn't close to being true.

Also ' Production and income measures of GDP nevertheless indicate Australia is effectively in recession, but the good news is that the bottoming of production around the world suggests Australia will avoid technical recession this year and that its effective recession will be brief.'

 

 

because they (Australia) were the only country in the world that didn't go into recession.

 

 

[Guest chris955]

It's amazing how many people just assume that the UK is no longer a manufacturing power.

 

I read somewhere that the UK remains the sixth largest manufacturing economy in the world--this is admittedly much down on what it used to be.As for your points concerning Germany and bailouts--agreed.

[Guest The Ropey HOFF]

Actually that isn't close to being true.

Also ' Production and income measures of GDP nevertheless indicate Australia is effectively in recession, but the good news is that the bottoming of production around the world suggests Australia will avoid technical recession this year and that its effective recession will be brief.'

 

 

Its still better than the 18months recession we have just had here in the UK and i fear there is a lot more to come with the cuts that will be needed to pay off the national debt, thanks gormless gordon. At least i have a get out of the uk card until 2015, we have validated our permanent residency visas and can leave this sinking ship, if the hole gets so big that it finally sinks. Old Gormless said yesterday, if he hadn't bailed out the banks everyone would have lost their money in the banks, imagine that - real scary all your money gone in an instant.

 

jim:chatterbox:

[Guest chris955]

:laugh: Yes it's great that this country wont have to pay back all the mounting debt.

[fish.01]

:laugh: Yes it's great that this country wont have to pay back all the mounting debt.

 

Australia does have a lot smaller govt debt to pay back though with increasing govt receipts over the coming years to pay it....I think the UK debt is a legitimate concern, though I have faith people in the UK will sort it eventually as it is a great country will lots of talented people.

[kernow43]

Another 15 billion added today!