On US economy ill, Australia sneezes a little

While the US economy hovers near a recession and systemic problems in its banking system,Australia's resources industry has stayed strong, propelled by China's demand for commodities. The major Australian banks have - so far - escaped the credit crunch with little damage, as well.



"One key characteristic that sets the Australian economy apart from the US (or the UK for that matter) is the consumer," he says.

"In the US, consumers have been spending way beyond their means, spending in excess of take home pay by borrowing against housing wealth. This is the root cause of the current financial turmoil. By contrast, Australian consumption growth has been slower than take home pay growth and reliance on mortgage equity extraction has been shrinking."

more...