Forbes Ranks Australia As Second Most Vulnerable To A Debt Crisis In Next 3 Years
Is Australia on the verge of financial meltdown?
The answer is "Yes" according to Forbes magazine.
Forbes recently listed seven countries "most likely to suffer a debt crisis" within the next three years
China came in at No. 1 followed by Australia at No. 2, then Sweden, Hong Kong, South Korea, Canada and Norway
While we escaped the 2008 GFC relatively unscathed, the situation will be different this time around.
... AFCA reports inure than 7,000 Australians went bankrupt in the March 2016 quarter, the fastest rate of bankruptcy since the GFC.
... House prices average 3.7 times the household income in the US and 4.6 in the UK. Yet in Australia it's 6.4 times including 9.7 times in Melbourne and 12.2 times in Sydney.
... Western Australia, Northern Territory and Queensland are already suffering through a once-in-a-generation mining bust.
... Falling oil prices are hurting our gas projects and tax revenues.
... Unemployment is already hovering at around 5.7 per cent.
But here's the most terrifying of all.
Australia's foreign debt has just tipped $1 trillion and government debt is predicted to rise to 38% of GDP by June 2018.
This is important because during the last GFC in 2008, the Rudd Government guaranteed $178 billion of wholesale debt to bail out our banks struggling with offshore funding.
Australia's high public debt means this may not be an option this time.