S&P outlines Australia's doom scenario

Standard and Poors has today affirmed Australia’s AAA sovereign rating:

The sovereign credit ratings on Australia benefit from the country’s strong institutional settings, its wealthy and resilient economy, and a high degree of monetary and fiscal policy flexibility.

The country’s high external and household indebtedness, as well as vulnerability to weakening commodity export demand, moderate these strengths.

We have affirmed the unsolicited ratings on Australia at ‘AAA/A-1+’, and the outlook remains stable.

The stable outlook is based on our assumption that Australia’s historically conservative budgetary policies will remain in place.

All good. But here’s the interesting part:

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

S&P outlines Australia’s doom scenario