{"id":4853,"date":"2012-07-14T20:23:04","date_gmt":"2012-07-15T00:23:04","guid":{"rendered":"http:\/\/goldstocksforex.com\/?p=4853"},"modified":"2012-07-14T20:23:04","modified_gmt":"2012-07-15T00:23:04","slug":"australia-and-the-endgame","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2012\/07\/14\/australia-and-the-endgame\/","title":{"rendered":"Australia and the Endgame"},"content":{"rendered":"<blockquote><p><strong>John Mauldin<\/strong>: We wrote about Australia in a full chapter of <em>Endgame<\/em>. Their economy never really suffered in the recent debt crisis, in large part due to their growing housing market and their trade with China. If you talk to the average Aussie, they think that all is right with the world. They acknowledge a few issues but see nothing major like the rest of the world has experienced. Jonathan and I think otherwise. Their housing market is by recent standards in a clear bubble (which I know will get me a lot of email). Their banking system is dominated by foreign deposits (shades of Northern Rock, but not as bad as Iceland). They are vulnerable to a Chinese economic slowdown. I should note that Chinese GDP growth was \u201cdown\u201d to 7.6% last quarter. That China might slow down should not come as a surprise. No country can grow at 10% forever. Eventually the laws of large numbers and compounding take over. All that being said, Australian government debt and deficits are under control. Any problems should be of the nature of \u201cnormal\u201d business cycle recessions and accompanying issues.<\/p><\/blockquote>\n<p>Comment:~ Massive Chinese stimulus saved Australia from the GFC but that is no reason to become complacent. As Steve Keen recently pointed out, Australia is in a similar position to Spain in 2006. Spain was generating a fiscal surplus which it used to reduce government debt below 40% of GDP, but its banks were exposed to a large housing bubble funded by offshore deposits. Australian banks are similarly exposed to offshore funding and are leveraged 50 to 1 on residential mortgages (<a title=\"Macrobusiness: Deep T - Casualties of the externality\" href=\"http:\/\/www.macrobusiness.com.au\/2012\/05\/casualties-of-the-externality\/\" target=\"_blank\">Macrobusiness May 4, 2012<\/a>) &#8212; even after adjusting for mortgage insurance &#8212; leaving them highly vulnerable to a contraction. We also need to recognize that Australia is not exposed to a slowdown in China&#8217;s GDP growth, but to a slowdown in Chinese spending on infrastructure and housing. While GDP growth may fall to zero, the Chinese economy will still survive, but what are Australia&#8217;s chances if that is accompanied by say a 50 percent fall in new infrastructure and housing projects? The fall in iron ore and coking coal exports would have a far greater impact on the Australian economy.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>John Mauldin: We wrote about Australia in a full chapter of Endgame. Their economy never really suffered in the recent debt crisis, in large part due to their growing housing market and their trade with China. If you talk to the average Aussie, they think that all is right with the world. They acknowledge a &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2012\/07\/14\/australia-and-the-endgame\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Australia and the Endgame&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[40,5],"tags":[290,381,663,2089,2552,2925],"class_list":["post-4853","post","type-post","status-publish","format-standard","hentry","category-australia-nz-countries-regions","category-economy","tag-australia","tag-banks","tag-china","tag-leverage","tag-offshore-funding","tag-residential-mortgages"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Australia and the Endgame - the patient investor<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Australia and the Endgame - the patient investor\" \/>\n<meta property=\"og:description\" content=\"John Mauldin: We wrote about Australia in a full chapter of Endgame. Their economy never really suffered in the recent debt crisis, in large part due to their growing housing market and their trade with China. If you talk to the average Aussie, they think that all is right with the world. 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Australia has finally exported its economic \"growth\" model ;-) Source: Can \u2018New\u2019 Keynesianism Save the Chinese\u2026","rel":"","context":"In &quot;China &amp; HK&quot;","block_context":{"text":"China &amp; HK","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/china-hk\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/thepatientinvestor.com\/wp-content\/uploads\/2016\/03\/thediplomat_2016-03-06_13-17-32-386x257.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":16340,"url":"https:\/\/thepatientinvestor.com\/index.php\/2018\/06\/09\/12-charts-on-the-australian-economy\/","url_meta":{"origin":4853,"position":1},"title":"12 Charts on the Australian economy","author":"Colin Twiggs","date":"June 9, 2018","format":false,"excerpt":"Australian GDP grew at a robust 3.1% for the year ended 31 March 2018 but a look at the broader economy shows little to cheer about. Wages growth is slowing, with the Wage Price Index falling sharply. Falling growth in disposable income is holding back consumption (e.g. retail spending) and\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":39471,"url":"https:\/\/thepatientinvestor.com\/index.php\/2022\/12\/10\/australia-hard-times\/","url_meta":{"origin":4853,"position":2},"title":"Australia: Hard times","author":"Colin Twiggs","date":"December 10, 2022","format":false,"excerpt":"You don't have to be an Einstein to figure out that 2023 is going to be a tough year. Australian consumers have already worked this out, with sentiment plunging to record lows. The bellwether of the Australian economy is housing. Prices are tumbling, with annual growth now close to zero.\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"Australia: Consumer Sentiment","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2022\/2022-12-09-aus-sentiment.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":18830,"url":"https:\/\/thepatientinvestor.com\/index.php\/2019\/09\/06\/australia-the-elephant-in-the-room\/","url_meta":{"origin":4853,"position":3},"title":"Australia: The elephant in the room","author":"Colin Twiggs","date":"September 6, 2019","format":false,"excerpt":"June quarter real GDP growth slowed to an annual 1.4%, the lowest since the 2008 global financial crisis (GFC). Major contributors to growth are household consumption, public demand and exports; while the biggest handbrake is investment. A quick look at the RBA chart shows that consumption is slowing but at\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":20155,"url":"https:\/\/thepatientinvestor.com\/index.php\/2020\/03\/28\/asx-braces-as-china-shock-threatens\/","url_meta":{"origin":4853,"position":4},"title":"ASX braces as China shock looms","author":"Colin Twiggs","date":"March 28, 2020","format":false,"excerpt":"The ASX 200 continues to experience record-breaking volatility, with sharp falls followed by sudden, unpredictable rallies. This is typical of a bear market. Mining is under-pinned by strong iron ore prices but that may not last. China faces the mother of all demand shocks in the year ahead. Demand for\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":61754,"url":"https:\/\/thepatientinvestor.com\/index.php\/2025\/05\/23\/global-outlook-three-big-moves\/","url_meta":{"origin":4853,"position":5},"title":"Global outlook: Three big moves","author":"Colin Twiggs","date":"May 23, 2025","format":false,"excerpt":"This is a very short update. A question from Geoff in Buderim, QLD, prompted me to summarize the three big moves in international markets and their likely effect on Australia. I hope you find it useful: US Stagflation The US stagnates with low growth and high inflation. The USD weakens,\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/4853","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/comments?post=4853"}],"version-history":[{"count":0,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/4853\/revisions"}],"wp:attachment":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/media?parent=4853"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/categories?post=4853"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/tags?post=4853"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}