Wednesday, September 7, 2011

Why the Aussie economy is different from the European

The Western world is in financial trouble – well, that´s no big news, right...  – but the funny thing is that Australia seems unaffected. Some say it´s because of the mining boom, but I prefer to explain it with the Aussie “no worries” spirit. Since few in this part of the world are following the news or bothering about those dramatic events overseas, the psychological amplification of the drama won´t appear. We just potter on as normal, so the stock market and house market won´t be as nervous as in Europe or the Us.
Back in Sweden I watched the news with a frown on my face, because all the people there were just so worried and stressed and concerned. Everyone saw disasters in each direction, watching out for trouble, searching for risks. A totally different vibe than what you get from the Aussie news where the hosts are joking and presenting news about fashion and sharks.
You can laugh at the Australian care free attitude and even call it stupid... but... When you dwell on things, you tend to feed them and they grow. But we put the tragedies on a diet by going surfing and throwing another shrimp on the barbie... Light always beat darkness.
The Australian Bureau of Statistics just released a report on household spending, showing household income has climbed 50 per cent since 2003-04, way ahead of prices which have climbed 19 per cent. And we have not spent all the extra income, we have tucked some away; spending grew 38 per cent.
This is good news, considering the earning to spending ratio has not been looking good in the West the last decade. In 1994, the savings rate was nearly 5 % in Us, but by 2006 it had fallen below zero – to negative 1 %. Americans were not only not saving; they were spending more than they earned. At the same time Europeans save an average of 20%. (compared with Japan 25% and China 50%)
I believe the economy is a result of our mindset. We get what we expect, and the placebo effect is just as relevant here as in medical research (showing for example that when researchers tested the effect of 6 leading antidepressants, they noted that 75% of the effect was duplicated in placebo controls.)
We keep on spending, we keep on living and breathing, and so is the economy, which means adworld does not need to worry just yet; the target audience won´t have saving on their mind – at least not in a frustrated way. (banks should worry though...)

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