Recently Australia has been host to a procession of people telling us that things “really aren’t that bad”, even though we think they are. Lloyd Blankfein, the chief executive officer of Goldman Sachs even described us as being “overwrought” and that Australia was in a place that the US could only hope to be.
While consumer confidence has suffered in recent times, in reality Australia’s growth rate has been well ahead of the rest of the developed world.
It is true that considerable change across industries has occurred, with the headline growth rates hiding the upheaval we’ve seen in industries from manufacturing to our own financial services.
Nevertheless as evidenced by numerous factors, Australia has been doing just fine. Perhaps we have the “grass is greener” mentality, as is often the case when people living in an economy don’t recognise the dangers and opportunities as much as an outsider looking in.
How the tables have turned for the US
In the United States very few saw the crash of 2007 coming – even despite the fact that in hindsight it seems obvious that if you leverage the economy across all sectors to the highest levels in history, something has to give.
Yet the average consumer seemed to think it was like one of Gatsby’s great parties, with someone else able to collect the bill forever. Even the Federal Reserve, normally the one to “take away the punch bowl” when the economic times get too good, seemed too often instead to refill the punch-bowl in the years preceding the global financial crisis (GFC).
But six years later, the tables have turned. Now, the US consumer has the lowest debt ratios in nearly 20 years. Low interest rates and a bottoming housing market have combined to make home ownership the most affordable in decades.
Despite talk of America’s decline, which company dominates global online search? Google. Which is the world’s biggest ecommerce firm? Amazon. What about online auctions? eBay. The world’s most valuable brand? Apple.
Activists recently noted that the overwhelming majority of consumer brands are now owned by a handful of corporations including Coca Cola, Pepsico, Kraft, Proctor & Gamble, Kelloggs and Johnson & Johnson. Guess where these companies are listed?
If the US had an Achilles heel, it was its dependence on foreign energy.
Read More: http://www.moneymanagement.com.au/analysis/investment/2014/international-opportunities-for-australian-investo
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