As good as it gets: Australia now the biggest financial haven on Earth
With the global financial crisis battering major markets across the world, investors have been packing their suitcases and moving to new regions seeking refuge in potential financial havens.
However, doubts as to whether there are really such havens have been creeping in as major economies around the world have proven volatile in the past few months. Market crashes have been observed to strike with little warning and severe effects this fiscal year as proven by the Russian and American examples.
At the onset of fiscal 2008, Russia prided itself on being a safe zone where the effects of the global financial crisis are hardly felt. After its conflict with Georgia in August, Russian stock exchanges crashed, triggering intervention from the federal government.
The Russian market decline, however, pales in comparison to the Dow Jones free fall earlier this week which plunged the United States economy into critical levels. A US$ 700 billion rescue fund was rejected by congress, forcing investors into retreat mode.
Investors are now looking for an industrialized economy which could house a robust trading environment in the midst of the chaos. Enter Australia and its economic battle plan which banks on a hefty budget and good national interest rates to act as safety nets should trouble brew in its backyard.
Australian authorities say that even if revenues slow down as an effect of the global crisis, growth will continually be stimulated by making use of the the budget and interst rates to keep investor confidence high. This confidence, they believe, is an element absent in other trading floors around the world which in turn slows economic velocities of other nations down.
The Kevin Rudd Government has earmarked Australia's financial situation as the best in the world today. Interest rates are at 7 percent compared to 2 percent in the US while the budget is in abundant surplus while Washington's budget is in deficit and dwindling fast.
"Strong regulation, the best regulatory system in the world, strong balance sheets on the part of our banks, as well as a strong budget situation on the part of the Australian Government means that Australia's situation in this period of global financial turbulence is the best that you could have," said Rudd.
Financial experts agree with Rudd. Prolific investors such as Jamie McIntyre are urging Australians to capitalize on the situation by taking advantage of the stable Australian share market. He says even ordinary people can make money from stocks as advice from licensed property brokers is readily available for free in the Internet.
Australia could very well be that financial haven which investors are seeking. The country's economic status is as good as it gets considering what we've been seeing as of late.
Read: SBS
