Aussie economy running on thin ice – the commodity leader joins the recession bandwagon
Alan Hershey
Oct. 3, 2007

There are some very early disturbing signals in the Australian economy. The bubble is now clearly visible. The Australian home building is entering a massive slowdown after a fantastic show for several years. The economy is ready to snap its 16th year of expansion. The negative growth will signal a long-term change in economic dynamics.

Australian central bank's rate increase took borrowing costs to the highest in 11 years and turmoil in global financial markets dented consumer and business sentiment. The combination is deadly. As liquidity vanishes from the back door, the Australian central bank kept increasing rates.

The effect is very clear. The Australian stock market has faltered big time and formed a well-matured elliptic top. The residential real estate market is also in the slump. If the commodities correct somewhat especially the metals, Australia will be in recession.

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READ MORE>>

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