The last quarter has witnessed a fascinating and increasingly global debate about the sustainability of Australian debt. It began with the commodities bear market, was stoked by the Variant Perception report into dodgy mortgage broker practices, has been hosed down by dubious analysis from the CBA and a limited take by Lombard Street research. Now, last week Steve Keen re-entered the fray at Forbes:
For decades, some of the most important data about market economies was simply unavailable: the level of private debt. You could get government debt data easily, but (with the outstanding exception of the USA—and also Australia) it was hard to come by.
That has been remedied by the Bank of International Settlements, which now publishes a quarterly series on debt—government & private—for over 40 countries. This data lets me identify the seven countries that, on my analysis, are most likely to suffer a debt crisis in the next 1-3 years. They are, in order of likely severity: China, Australia, Sweden, Hong Kong (though it might deserve first billing), Korea, Canada, and Norway.
