What happens when your business is massively reliant on one customer … and that customer stops needing as much of your product?
Ask Wayne Swan:
Steel production not looking good. And total production growth gently sliding.
Why might that be?
House prices topped out and rolling over. Floor space sold falling.
And fixed asset investments ground to a halt:
Why is all this happening?
The same old story, as seen throughout the Western world, now in China too.
When the “credit” (ie, debt) needed to keep blowing up a bubble slows and falls, the end is nigh.
And without all that debt-fuelled building activity to drive “GDP growth”?
Say “bye bye” to that surplus fantasy, Swanny.
Oh yes, no doubt you will loudly trumpet a forecast surplus in the May budget.
But I for one am willing to bet you that, come end June 2013, there is not a snowflake’s chance in hell of your delivering one.