Tail of the Dragon

The global economy remains firmly on track for a continued deepening of the Great Recession into a self confessed depression. In Europe the PIIGS seem content to splutter along with the heavily indebted economies on a ever more tenuous lifeline from the European Central bank and faint hopes of support from Germany.

The United States is an economic disaster zone with real unemployment approaching 20%, several states on the verge of tangible insolvency, and the US at a Federal level in a position of hopeless indebtedness and continuing to support the mercantilist policies of China through protracted inaction.

Australia remains in a state of prosperity apparently unparalled in western economies. A factor I confess to never anticipating. However I suspect that this merely conceals the extent of our future fall. We remain hitched to the tail of the dragon and our economic fate linked to our Chinese mineral exports (an economy still to pop its numerous bubbles).

The next stage of the slow motion train wreck we refer to as the global economy remains most likely a sovereign debt default leading to the repricing of sovereign risk and the concommitant currency adjustments that will in evitably follow.

Please click on the link above to Karen Maley's sombre article from today's Business Spectator on European debt and rising service costs.