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Concerns of a slowdown in China have caused investors to grow even more cautious about Australia.On a recent trip to Australia, Societe Generale’s Dylan Grice was taken aback when he came across a book titled “The Australian Moment” by George Megalogenis which talked about the ‘Australian miracle.’
“I had a great time in Oz: fantastic people, wonderful atmosphere, and a truly beautiful country. But I felt more relaxed when Australians called themselves the lucky country with their typical honesty, realism and humility. Now that it’s been upgraded to the status of miracle I’m worried.”
In a new report titled Popular Delusions, Grice argues why Australians should be worried that someone is calling their country a miracle. He points out that Australia is currently benefiting from a commodity bull market that is inflating a credit bubble, which itself is being inflated by a Chinese credit bubble.
He explains his argument in 7 charts.