Jump to content
House Price Crash Forum
Sign in to follow this  
CrashConnoisseur

Mcwilliams: Borrowing Is Only Going To Dig Us Into Deeper Hole

Recommended Posts

Another insightful article from David McWilliams...

'Borrowing is only going to dig us into deeper hole':

http://www.davidmcwilliams.ie/2009/05/28/b...nto-deeper-hole

....the Brits are doing everything in their power to stave off the recession and prevent it turning into a depression.

Forget all the stuff about “green shootsâ€; what is in the balance here is the difference between a recession and a depression and the British authorities know it. They are printing money when possible and borrowing to keep the show on the road.

Sterling has been allowed to collapse and there is no sense that they are worried about it falling further. In short, they are trying to borrow their way out of a recession that was caused by too much borrowing in the first place. The 0pc sofa finance deals in Habitat are the thin edge of the wedge, emblematic of a society, like our own, that has run up a financial cul de sac. We think that by borrowing and spending more people’s money now, we will get out of this hole and then escape the ramifications of a 10-year binge.

The whole of the English-speaking world is at the same game. If we get away with it, we will simply transfer the weight of our debts on to the next generation.

But the real test is in the government bond markets. Are they prepared to accept our IOUs yet again? Hardly, which is why a crash in the global bond market in the months ahead is probably going to mark the next phase in the first Great Recession of the 21st century.

Whatever happens, we are in an intellectual conundrum because the whole point of our economies can’t surely be more of the same, more debts and more stuff made in China ending up mothballing in the wardrobes of the West.

Share this post


Link to post
Share on other sites

'...crash in the global bond market in the months ahead is probably going to mark the next phase in the first Great Recession of the 21st century'.

Agreed. I expect this to begin late Q3 2009.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   324 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.