In 1960, Mao and Khrushchev fell out over ideology. In 2025, the fracture line isn’t in Eurasia, it’s being felt across the Anglosphere. The difference? Not ideology. Compound interest.
Bond yields in Australia, Canada, and the U.K. jumped 120–180 basis points since July.
- Refinancing costs up 25–40 % year-on-year.
- Every uptick in interest erodes public net worth and accelerates insolvency.
States already in the Red after COVID are now staring at total insolvency
Total debt = every dollar the government owes (bonds, bank loans, leases, PPPs, swaps).
Net worth = total assets in State coffers minus total debt. Today even a sale of every bridge, hospital and office block won’t come close to clearing debt in many states.
🦘 Australia — The Debt Continent
| State | Net Worth | Total Debt | Why It’s Broken | Impact of Rising Rates |
|---|---|---|---|---|
| Victoria | –A$ 101 bn | A$ 155 bn | COVID, rail blowouts | +1 % → A$ 600 m/month, unsustainable |
| Tasmania | –A$ 5 bn | A$ 7.8 bn | Hydro-dam overruns | Refinancing at 5.8 % wipes out surplus |
| South Australia | –A$ 19 bn | A$ 28 bn | Defence delays | Submarine costs in USD → tariff exposure doubles |
| New South Wales | –A$ 104 bn | A$ 178 bn | Metro tunnels, land slump | Negative equity projected until 2034 |
🇬🇧 UK — Councils Feeling the Squeeze
| Council | Net Worth | Total Debt | Problems | Interest Impact |
|---|---|---|---|---|
| Birming ham | –£ 3.5 bn | £ 4.3 bn | Pay bills + IT failure | Refinancing at 6 % → £210 m/year |
| Woking | –£ 2 bn | £ 2.4 bn | Skyscraper speculation | 35 % property slump → ratings downgrade |
| Slough | –£ 1.2 bn | £ 1.4 bn | Retail-bond binge | Debt rollover costs £90 m/year |
🍁 Canada — Provinces on the Edge
| Province | Net Worth | Total Debt | Weak Spots | Rate Shock |
|---|---|---|---|---|
| Newfound land & Labrador | –C$ 17 bn | C$ 21 bn | Muskrat Falls, oil slump | Refinancing 2030 bonds costs C$ 300 m/year extra |
| Nova Scotia | –C$ 16 bn | C$ 20 bn | Aging population, hospitals | Debt service up 28 % in a single cycle |
| Ontario | –C$ 440 bn | C$ 450 bn | Decades of deficits | 6.2 % yields eat every new dollar of revenue growth |
| Manitoba | –C$ 32 bn | C$ 38 bn | Flood overruns, shrinking aid | Crown-utility sale can’t offset 150 bp yield rise |
🇳🇿 New Zealand — Local Governments in a Vortex
| Council | Net Worth | Total Debt | Issues | Rate Shock |
|---|---|---|---|---|
| Kaipara | –NZ$ 190 m | NZ$ 220 m | PPP sewer blow-up | Refinancing > 12 % of annual rates revenue |
| Dunedin | –NZ$ 1.1 bn | NZ$ 1.3 bn | Stadium + insurance crisis | Credit-watch → +40 % interest costs |
| Christ church | –NZ$ 2.4 bn | NZ$ 2.9 bn | Post-quake rebuild | USD-linked loans → 50 % unhedged liabilities |
Tariffs aren’t just trade policy. They signal confidence. When it breaks:
- Inflation strengthens → borrowing costs spike.
- Exports slump → local tax bases shrink.
- Credit spreads widen → debt becomes unserviceable.
A self-reinforcing feedback loop tests the Anglosphere more than politics ever could. The Sino-Soviet split was about manifestos. The Anglo-American split is about balance sheets
