Diana Mousina, an economist at (AMP Capital), Australia`s largest fund manager, summarized the United States in a new study released Monday (May 28, 2018). Major risks to European and Australian domestic markets. Australia: the world`s most feared economic crisis, the United States and we are beginning to show signs!
Australian economic risks: the real estate market remains the largest bomb, and all risks are related to the housing market. As home prices in the Australian capital have fallen since September, attention has shifted to stricter lending standards and whether that will put further downward pressure on home prices. Stricter lending standards are good for long-term financial stability, but in the short term, as credit growth slows, these developments in the real estate market are likely to exacerbate the fall in house prices.
Economic risks in Europe: political instability is taking place across Europe, with the populist right-wing Social Democratic Party gaining support in Germany`s 2017 general election. Italy`s attempt to form a joint government has now failed. Another election is about to begin, and there is uncertainty as to whether Italy will remain in the euro zone. Europe`s strength lies in the union, which is determined by internal affairs. Now the self-reliance of the European countries has become a high-risk thing.
U. S. economic risks: although recent economic data show that the United States economy further strengthened. More specifically, it`s corporate debt and government debt. So far 2018, U.S. corporate debt prices have had their worst start to the year since the 1990s. Even more dangerous, debt costs have been rising as Treasury yields rise, but unexpected numbers of U.S. companies continue to flood the market in search of debt capital. The current lending standards for large and medium-sized companies in the United States are still loose, which means that lenders have not yet discovered the danger, or they have found it, but in the bureau, there is no alternative but to push. U.S. credit-card default and bad-debt rates are rising and appear to be recreating the "subprime" crisis a decade ago. Higher budget deficits will also put upward pressure on public debt, which has been growing since 2009.
And the United States of Australia`s heavy blame, in fact, is a bubble. The foam flourishes, the people suffer, the foam goes out, and the people are bitter.
As we all know, much of the increase in national wealth now comes not from increased productivity, but from our constant erosion of tomorrow`s wealth-the boost of global debt. That is to say: we have been living in an ever-expanding bubble.
And to deal with these crises, "currency issue" is no doubt one of the best medicine. In essence, currency overissuance is the fate of all debtors. Now that the world is almost naked, people`s credit is peeled off in the air by money.
And the other thing is real estate.
Also, globally, high oil prices trigger inflation. A strong global background is good for risky assets. But these three salient risks should be seen as warning signs of global environmental degradation.
