Sunday, 3 July 2011

RBA’s McKibbin Sees Greece as First Carriage in World Fiscal ‘Train Wreck’

http://www.bloomberg.com/news/2011-06-30/rba-s-mckibbin-sees-greece-as-first-carriage-in-world-fiscal-train-wreck-.html

The fiscal outlook “is what I call the slow motion train wreck -- the first carriage to break is going to be the Greek economy, but we have a series of economies facing very serious fiscal adjustment,” said McKibbin, a professor at Australian National University whose board term ends July 30, in a speech in Melbourne today. He said his comments reflected his personal views, not those of the Reserve Bank of Australia.

Australia is experiencing a surge in resource investment as mining and energy firms boost output to meet demand from China and India, two economies that account for more than a third of the world’s population. That’s bolstered demand for Australia’s dollar, the world’s fifth-most traded currency, which advanced 27 percent in the past year and reached $1.1012 on May 2, the highest since it was freely floated in 1983.

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