Last week, we asked "Is Australia the next Greece?" [8] It appears, judging bu the collapse in the Aussie Dollar, that some - if not all - are starting to believe it's possible after last night's 15-month low in China Manufacturing PMI [9]. As UBS previously noted, China's real GDP growth cycles have become an increasingly important driver of Australia's nominal GDP growth this last decade. With iron ore and coal prices plumbing new record lows, a Chinese (real) economy firing on perhaps 1 cyclinder, and equity investors reeling from China's collapse; perhaps the situation facing Australia is more like Greece than many want to admit.
Australian consumers are more worried about the medium term outlook than at the peak of the financial crisis, and rightfully so...
[10]
As China plumbs new depths in manufacturing, just piling on Aussie's woes...
[11]
The Dollar is rising this morning but all eyes are on AUD as it tests a very long-term trendline...
[12]
h/t @RaoulGMI
* * *
As The Telegraph previously concluded, [13] rather ominously,
The problem is that Australia, after decades of effort to diversify, is looking ever more like a petrodollar economy of the Middle East, but without the vast horde of foreign currency reserves to fall back on when commodity prices fall.
Instead, Australians must borrow to maintain the standards of living that the country has become accustomed to, which even some Greeks will admit is unsustainable.
Charts: Bloomberg
