The unlucky country: Part 1

Australia's low and declining economic complexity.

Dear Reader,

Despite living on the other side of the world, as a native Australian, I study the Aussie economy regularly. Things look bad. The lucky country is in for a world of economic pain that most will likely never have experienced before. 

Australia, until this quarter, had not had a recession for 27 years - the current global record. This would seem to suggest that the economy is robust, but it is actually anything but. The deleveraging that Australia so desperately needed in 2008 didn’t happen. We kicked the can down the road. 

The economy has been built almost entirely on selling the land (through mining and property) to Chinese money while the resident population service themselves. This is problematic as an economy is a lot like a spiderweb: the more anchor and radial threads, the better supported the web is, and the harder it is for storms and debris to tear it down. But if you build your web between two small sticks and layer on too many spirals, when it rains your web will …