A subscriber to my Debtwatch newsletter suggested that I establish a blog. I plan to publish my monthly Debtwatch report here, as well as sending it out to subscribers.
Next month I will also start a USA version of Debtwatch. The recent panic on Wall Street can be seen as yet another “correction”, but it might also be the beginning of the unwinding of America’s long-running housing bubble, which has driven private debt levels there to over 160 per cent of GDP–higher even than Australia’s. While we definitely have enough debt “home brew” of our own to trigger a crisis, we are as always just minnows next to the USA; the old saying that “if the USA sneezes, Australia catches a cold” may come home very powerfully soon if the world’s largest economy actually comes down with the pneumonia of a debt deflation.
ABC PM has an item on the US sub-prime meltdown tonight; I am interviewed for it, as is Ian Rogers from The Sheet and David Tennant from Care Inc Financial Counselling Service and the Consumer Law Centre of the ACT.