China at bursting point, Australia next? Societe Generale has produced a fascinating graphic showing the global leverage cycle and the positioning of...

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China at bursting point, Australia next? Societe Generale has produced a fascinating graphic showing the global leverage cycle and the positioning of countries in the cycle. Interestingly Australia and Canada are positioned just behind China in the dangerous leverage quadrant where debt growth accelerates and private sector savings rates go down whereas the US and most of Europe are post-bubble and out of harms way. If you believe this graphic and Soc Gen's forecast then we are now headed for the bubble burst quadrant (China first), which will result in asset price declines. Check out the graphic: (VIEW LINK)


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