And while China and America bicker over currencies, Chinese firms are scrambling to buy real assets. And while Aussie banks source foreign borrowing to lend in local real estate, Aussie mining firms go begging for bits of capital that would bring world-class ore bodies (and key strategic resources) into production…by local producers and owners.
November 19th, 2009 | Dan Denning | 1 comment | ContinuedAll Posts Tagged With: "foreign borrowing"
Borrowing and Paying Back in a Foreign Currency
Capital flows are good now. The sun is shining and the country is lucky. But if we’re right and the strong Aussie dollar is mostly a function of the U.S. dollar carry trade, capital flows can reverse just as quickly. Currency traders probably love this because of the volatility. But the question is: how risky is it for Australia’s economy to source so much of its borrowing needs overseas?
November 18th, 2009 | Dan Denning | 1 comment | Continued
Aussie Banks Addicted to Foreign Borrowing
The article made three basic points. The deposit base of Aussie banks is “too low.” Aussie banks are over-reliant on offshore money. This entire situation is a “threat to economic recovery.” So it appears Aussie banks are addicted to foreign borrowing and are currently suffering from withdrawal symptoms. In case you missed it a few months ago we’ll say it again: Australia’s property boom was bought with borrowed money…
June 18th, 2009 | Dan Denning | 18 comments | Continued