Credit on the never never

After a small hiatus, back to the numbers..

This 'ere chart gives some explanation to the big movements in credit over the past couple of years.

The big blip for 'government' in 2020 was, of course, it 'borrowing' (from itself many assert) ~$400 billion over a few months to spray it all over the Australian economy.

The 'big blip' non-financial corporate Mar22 quarter is apparently largely down the BHP -> Woodside deal (which on-shored mega amounts of credit?)..

So with that out of the way we can get to 'Households' - that is a massive lift in sustained borrowing over past 18 months. Well above the average trend. And as I've observed before (and it's just as well the numbers 'add up' 😛) it does represent an uplift, above normal, of maybe 30-60 billion $dollars. Of course, I've said it before, say it again - the actual (nominal numbers) aren't necessarily all that important, or useful.

But on trend there's an awful lot of credit sitting out there waiting to be 'hammered' by higher interest rates over the next couple of years. So, hence there is some reasonableness to all the 'hand-wringing' (which I normally moan about) over what happens to peoples 'ability to pay' as interest rates lift payments/liabilities on everything from mortgages to car loans..

and I can tell you, buggered if I know 😛