Business Daily

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    From the desk of the Australian's Robert of Business Daily.

    The countries that are best placed in the current economic environment are those with strong domestic consumption.

    Both American and Australian consumers have been the driving force behind their economies and that will probably continue unless there is a major shock.

    And of course China's great industrial expansion is partly based on the expectation of a big rise in Chinese consumer demand.

    The problem in Japan and Europe is that they have never understood how to stimulate demand among their local consumers.

    In the case of Japan the banks can't lend for housing and other purposes because they are technically insolvent.

    And in Europe they have not developed consumer lending skills.

    The American consumer has led the global economies for the last few years.

    It can't keep that up because the US debt levels have become too high.

    For sustainable world recovery Japan and Europe have to find a way to stimulate their consumer spending.

    Australia has shown that the best way to do this is to provide easy credit for the housing market because changing life styles cause a tremendous latent demand for different accommodation.

    America used zero interest car loans.

    Japan and Europe may have to experience a little more pain before
    they act.

    This is only my view ... read the red stuff.
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