It's now $61.15 billion of gross borrowing by the Abbott government

Fri, 21 Mar 2014  |  

The week ends with the Abbott government borrowing a further $700 million today, which brings the total of gross borrowing since 9 September 2013 to $61.15 billion.

$61.15 billion of bond and T-Notes that have been issued in just over six months as the government funds the budget deficit, covers maturing bonds and T-Notes and prepares to fund a range of its policy expenditure items.

As I have noted at nausium on the issue of government debt over recent years, the Australian government's debt level remains trivial, chicken feed, small beer and the campaign of the Coalition Parties to suggest otherwise was factually flawed and it still is.

Even in government, the Coalition bemoan the level of debt and pretend it is a major factor threatening to undermine Australian sovereign risk or some similar nonsense.

The credit ratings agencies, all which rank Australia triple-A with a stable outlook and have since 2011, suggest the level of government is low. So do foreign investors who own close to three-quarters of the government bond market and a huge proportion of the stocks listed on the ASX as well as an increasingly large holding of property. They do so comfortable in the knowledge that a government debt problem that would hurt the Australian dollar or bond yields is very unlikely.

The cumulative effect of the new borrowing means that gross government debt now stands at $310.1 billion, some $36 billion higher than when Mr Abbott convincingly won the 2013 election.

It was always obvious the promise to stop the borrowing and repay Labor's debt were false. The facts confirm this.

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An update of the “sell everything” forecast & bet

Mon, 02 May 2016

It has now been four months since RBS analyst Andrew Roberts shocked the world, or at least the gullible, with his recommendation to investors to “sell everything”. This nutty ‘forecast’ prompted me to offer Mr Roberts some skin in the game with a bet that he would be wrong. The bet was outlined here: 

The scorecard after nearly four months is:

The Kouk 9
Roberts 2

Recall that to win, Roberts only has to get six out of 11 - 'everything' did not need to fall.

The two markets where Roberts is ahead are US house prices which are down 0.02 per cent and the Nikkei which is down 3.1 per cent. Some that he missed are quite extraordinary. The iron ore price is up 64 per cent, oil 46 per cent, Brazilian stocks are up 36 per cent and even US stocks are up ov er 7 per cent.

Deflation, the RBA and the Budget: Me on Sky TV

Thu, 28 Apr 2016

The day after the shockingly low inflation result for the March quarter, I was on Sky TV discussing the implications of this for the RBA. 

Here is the link: