We went to an ANZ Economic Insights breakfast the other month to hear ANZ Chief Economist, Cameron Bagrie give his thoughts on the key issues shaping the economy and financial markets.
I like these guys (bank economists). They don’t pull any punches, they tell it like it is and for the most part, they talk in language that everyone can understand.
We heard (what we all really knew) that the USA is still precariously fiscally balanced. Cameron used the analogy of a household budget to explain, they have:
- an income of $23,000
- outgoings of $35,000
- credit card debt of $12,000
- and only $385 in savings!
As I said, precarious.
In Europe, it’s more of the same; Cameron says their economic models are basically flawed. In the Eurozone, the economic architects and power houses are Germany & France (who have not been the best of friends for the past 1,000 years). On top of that, they have differing money psychologies. On one hand Germany says, we have to save money before we spend it (makes sense) and on the other, France, which has a Balance Sheet in tatters, has just lowered the retirement age so people can get to the dosh sooner [that the govt doesn’t have]!