... and not just as a vacation destination, but in terms of coming out of the financial crisis in pretty good shape, too. Here's my college freshman-level take on who the winners might be coming out of the financial crisis.
First off, I'd suggest that there are three countries that are in reasonably good shape to weather this financial storm. They are Germany, Australia and China. Let's take them one at a time, but first, let's lay out some ground rules for judging them.
The financial crisis was caused by too much debt, debt that couldn't be repaid. The recession is going to reduce income for each nation's government. Some countries will end up defaulting on their loans (a few already have) and some will devalue their currencies by printing money to cover their debts (England is in the process of doing this now). In order to escape the trauma caused by default or devaluation, a nation has to have cash reserves, low debt or both. Here's how these three stack up.
Germany has been running a current account surplus equal to about 7% of their GDP. If the US was doing that, we'd have a trade surplus of $910B! Germany has been storing up the cash. Germany has a large national debt, about 65% of GDP. By comparison, the US has a debt about 61% of our GDP. So Germany has a tidy pile of cash, but a bit of a debt problem. The German government has so far resisted calls for monstrous stimulus spending. They may be the only prudent ones in all of Europe. That's all to the good.
Unfortunately for Germany, they're exposed to monstrously huge defaults by their European brethren. Greece, Italy and Spain all look poised to default on their loans. Since all of them use the Euro, that can't be good for the currency. It definitely won't be good for German banks. My gut feeling is that the German government is staying out of the stimulus race, knowing they've got huge bank bailout bills just around the corner.
Germany is in good shape, but China is in much better shape.
China has trillions of dollars in cash and securities, built up over years of exporting more than they import. When Barack Obama talks about a massive stimulus plan and poses for his FDR-like portrait, guess whose money he'll be using? That is, until the Chinese decide that investing in China is better than investing in the US. After that, Obama might want to put on a hobo costume for his presidential portrait.
China can go completely crazy with stimulus spending and not go into debt for a long, long time. I think they'll do just that. China is still a dictatorship and the one thing dictators value above all else is stability. China will pay any price to avoid calling out the army to shoot demonstrators.
One thing I don't like about China is that I don't trust their accounting. Everything I read about it tells me it's a very murky business indeed. Who knows what's being spent where and what the true costs and prices are. Another problem with China is that in spite of the images you see in the news, China is still a very poor country.
That leads us to Australia, the last bastion of Western Civilization. While George W. Bush left Obama a mammoth deficit, Prime Minister Howard left his successor, Kevin Rudd a tidy $10B surplus. If that had been the US, it would have been a surplus of about $168B. Instead, Obama inherits a deficit of over $400B.
The Aussies are entering the stimulus race, too, but they're approach is much smaller than Obama's wild spending plans and they start with a national debt of only 17% of their GDP - one fourth of our own. Even if they jump into the shark tank with Obama, they've got a long way to go before they get into serious debt trouble.
Unlike China, Australia's financial system is modern and relatively clear. You can invest in Australia without wondering just what is going on with your money.
Finally, one of Australia's biggest trading partners is China. Australia exports a lot of raw materials to the Chinese, raw materials that are necessary to build the infrastructure the Chinese will almost assuredly start building to prevent unrest.
If I was going to pick a clear winner coming out of the crisis, it would have to be Australia.