Oliver’s Insights

Oliver’s Insights is a special commentary by Dr. Shane Oliver, AMP Capital’s Chief Economist, on issues and trends affecting the economy and financial markets. Dr. Oliver is supported by a team of economists dedicated to delivering timely commentary and the asset allocation decisions for AMP Capital’s diversified product range.

Oliver's Insights
The blowout in public debt - how big an issue?
5 February 2010 (PDF - 196 Kb)

Key points:

• A global blowout in public debt has been a key outcome from the global financial crisis. Aging populations are also playing a role.
• Debt crises in peripheral countries such as Greece and Dubai probably aren’t enough to create a major global problem, and default is highly unlikely in key advanced countries such as the US, UK and Japan. However, high public sector debt and/or measures to deal with it will act as a significant medium-term constraint on growth in advanced countries and could result in a more volatile economic cycle over time.
• Fortunately, compared to key advanced countries, emerging countries generally have low public debt levels, as does Australia. This is another reason to favour emerging country and Australian shares and bonds over US, European and Japanese shares and bonds on a medium-term basis
  

Oliver's Insights Archive
Shares hit a speed bump - 2004 all over again? (29 January, 2010) China starts to unwind some of the stimulus (15 January, 2010) Monetary tightening and the recovery in growth assets (13 January, 2010) Review of 2009 and Outlook for 2010 (10 December, 2009) Rising Australian interest rates - how far? how fast? (1 December, 2009) A (slightly) different cycle - the ascent of the emerging world (24 November, 2009) Why is the gold price so strong and can it continue? (17 November, 2009) What is the risk of a double dip? (13 November, 2009) Is the cyclical recovery in shares over? (5 November, 2009) Unlisted commercial property values nearing recovery  (30 October, 2009) Australian versus global shares (21 October, 2009) The Australian dollar on its way to parity again (29 September, 2009) Four rules for successful investing (24 September, 2009) Lehman Brothers' demise one year on (15 September, 2009) What will rising interest rates mean for investors? (11 September, 2009) Sharemarket earnings and valuation post reporting season (1 September, 2009) Are shares offering enough of a risk premium over bonds? (20 August, 2009)