Australia's debt now tops $200 billion: Good On Ya Wayne!!!

I've heard lots of people have a dig at "loose cannons" like Barnaby Joyce and Bob Katter. They do however bring to our attention things that we need to know, and of course this will rock the boat of those who sometimes seem to be there just to play the game, look good (smile for the camera, your corporate position on finish with government depends on it) and make money.

So here's another news worthy article from Barnaby; not because it's from Barnaby, not because of the way it addresses things, and not becasue I like rocking the boat! Rather, it's news worthy because I don't see anyone else much bringing home important information like this!

Read on, dear reader...

Steve B
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Senator Barnaby Joyce

Shadow Minister for Regional Development, Local Government and Water

Leader of The Nationals in the Senate

LNP Senator for Queensland

26 August 2011

Nation's debt tops $200 billion after Labor borrows $100 million per day

Congratulations Wayne on your double century. We knew if you stayed at the crease long enough you would get there. Actually it didn’t take you long at all; you have been doing a "fine job".

I have always had "complete confidence" in your ability to give Australia its largest debt in history.

Today our nation's debt went over $200 billion for the first time ever. We borrowed $3.2 billion over the last week.

Our debt ceiling was $75 billion when this crowd got into government. On 11 March 2009, Wayne Swan invoked "special circumstances" to increase it to a "temporary" level of $200 billion. In the last budget the government has increased it permanently to $250 billion.

If we keep borrowing money like we borrowed last week, we might be able to give this latest ceiling a nudge.

This fiasco that is masquerading as a government has got to end. This relationship cannot go on.

If you go to www.aofm.gov.au you will see that your nation's "Total Commonwealth Government Securities on Issue" as of today sits at $200.242 billion.

The Labor party has increased our gross debt by $140 billion since they came to office in November 2007.

They have been in government for 1371 days and have therefore borrowed over $100 million per day.

There are 12.3 million taxpayers in Australia, so this government has borrowed an extra $11,000 on behalf of each of them.

"What have we got to show for this debt? Fluffy stuff in the ceiling which burned down 190 homes and billions of dollars on school halls which haven't made our kids any smarter. The debt didn't save us from a recession, record prices and record volumes of coal and iron ore exports did."

More information-Matthew Canavan 0458 709433

Globalisation Driving the Nation State to Bankruptcy

Even five years ago, it was unusual to hear of "Nation States" and their participation in the global economy as corporate units, with borrowings (debt) just like other "corporations" (yes you heard me right.I mean like the City Of London, and Queensland Incorporated). this newsletter from Dan Denning of Daily Reckoning Australia takes a look at the Nation States and global forces, and pokes a stick at what might happen...

Steve B
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--You know there’s a whole other world out there. Someone might want to tell this to Australia’s political establishment. It’s narrowly focussed on the idea of taxing carbon dioxide emissions as a means to redistribute income in the Aussie economy. But meanwhile, there are some ominous signs from the rest of the world that could spell trouble here soon enough.
--The first example is Greece. Default on Greek sovereign debt, as we’ve mentioned before, is seemingly inevitable. Everything that happens between now and then is a delaying tactic so that select European creditors can sell their Greek debt or otherwise reduce their exposure to the eventually restructuring/de-facto default.
--Ratings agency Standard and Poor’s lowered Greece’s sovereign credit rating by three levels to Triple C. Greece sits at the bottom of the sovereign ladder, now, at least in terms of credit ratings. S&P said it considers a restructure of Greek debt, where creditors take losses and accept a longer maturity, is effectively a default.
--Greece is a prelude to what will happen at local, state and national levels all over the Western world. It will vary in some places, of course. In Europe, nations like Greece, Portugal, Ireland, Spain, and Italy are unable to deal with huge government debt loads with inflation, the traditional way of easing debt burdens. This forces these countries to cede sovereignty to their European money masters, sell off national assets, and accept austerity.
--Greece is the birthplace of modern democracy. There’s probably something fitting about Greece being the first Western nation to deal with a full reckoning of its debt problem.  And of course the debt problem is only the extension of the problems of the Western Welfare State in a globalised world. Globalisation, come to think of it, is proving to be the enemy of the Nation State.
--We’ll save the elaboration of that thought for later this week. For now, even if Australian lenders have no direct exposure to a Greek default, they will have direct exposure to the low-level chaos that ensues in Europe’s banking market, and the general ripples in global capital markets (higher interest rates).
--What about China? That’s a much more understandable and immediate concern to Australia. Reuters reports that China’s money growth has slowed to a 30-month low. Hikes in reserve ration requirements and interest rates are finally starting to bite. That said, the broadest measure of Chinese money supply (M2) was still up 15.1% for the 12 months ending in May. And Chinese banks still loaned $85 billion in new money that month.
--Investment in fixed assets—resource-intensive construction and infrastructure projects—is running at 50% of Chinese GDP. That’s historically high and unsustainable. But we’ve been saying that about China for a while now. So what should you watch for to see that the government has finally popped China’s credit bubble?

--How about the Shanghai Composite, China’s broadest measure of stocks? There’s been a speculative boom in Chinese property, too. But the stock market is the first place you start to see tighter credit growth hit speculators. The Shanghai Composite is down 12% since early April. Check out the 10-year chart below.

--A 10-year perspective captures a lot of history. You can see that Chinese stocks were not big beneficiaries of the big 2003 interest rate cuts in the Western World. But by mid-2005, the resource and consumer demand those rate cuts had triggered (via liquidity) started to get priced into the Chinese market. And with Chinese interest rates low and government stimulus high, the market took off.
--After the GFC crash the Chinese market recovered more quickly than its Western peers. But since touching 3,500 in late 2009, it’s made a series of lower lows. Now, the 50-day moving average is again in danger of crossing below the 200-day moving average. That’s a bearish short-term sign.
--Is it a bearish long-term sign, though? And does it tell you that China’s credit bubble has popped, with economy-wide deleveraging on the way? It’s too soon to say that. Official Chinese consumer inflation numbers come out tomorrow, though. If the CPI is running hot at 5% or better, expect more monetary tightening by the People’s Bank of China. And don’t expect investors to like that.
--Finally, our thoughts and prayers go out to our readers in New Zealand and especially Christchurch. More aftershocks from September’s quake hit the city yesterday. More are expected. We hope our readers are safe and sound and doing the best they can.
Dan Denning
Daily Reckoning Australia

source: http://www.dailyreckoning.com.au/globalisation-driving-the-nation-state-to-bankruptcy/2011/06/14/
date: 14/06/2011