Uk Is The Worlds Most Indebted Economy

[Moneyalchemist]

"Taking all debt together, private, public and financial sector, Britain (top orange line) is the most indebted nation in the world, far exceeding the eurozone countries now in so much trouble."

http://blogs.telegraph.co.uk/finance/jeremywarner/100010956/britains-deleveraging-nightmare-threatens-its-triple-a-rating/

Once deleveraging starts in earnest asset values will need to be broat down .. HPC here we come!

[interestrateripoff]

There’s plenty of room for argument about the accuracy or even meaningfulness of such debt comparisons. Since most debt liabilities are backed by an equal and opposite value of assets, you might argue that it’s actually a rather good thing to have so much of the stuff, as it also indicates high comparative wealth.

We need more information.

Although I appreciate the nod to the debt is wealth maxim.

[dryrot]

We need more information.

Although I appreciate the nod to the debt is wealth maxim.

Comment #1 (when I looked)

" Ian Mortimer - minutes ago -

As an Engineer I look for pragmatic solutions. Simplistically we have followed the Japanese model of national debt creation. Which in my opinion shows that it doesn't matter how hard you work or how much you manufacture, if you have a central target of keeping inflation and an unregulated banking sector that offers 100% mortgages or more as the U.K / Japan then you will have speculator pricing of housing. This has crippled the U.K economy and leaves us with little room to manoeuvre. We need to crash the housing market through a graduated tax levy starting at 50% of the mortgage loan (very painful short term, but better than paying the banks), build more good quality communities (not just red brick estates), cut housing benefits significantly, not pay benefits to anybody who doesn't have a N.I number. Give foreign students a N.I number which starts ZZ and the date they must leave. Deport any foreign criminals immediately without appeal even if it means amending the Human Rights act. "

[GinAndPlatonic]

What he under estimates is the ability of the UK to switch direction on a sixpence so to speak. The Govt only needs to make some more slightly minor changes to some budgets which will make people more self reliant and the UK can become very efficient very quickly.

Can you suggest a few that would repay much of our debt significantly.?

[The Masked Tulip]

I heard a story this week about a uni which discovered that it allegedly has some 70 lecturing staff, including professors some of whom earn 70K and above and many who earn over 50K, who have not had a single student in over a year.

I heard that one department had so few students that they were going to sack the entire staff but, after much politicking, they decided to allow the staff to stay on if students on other degrees attended one language lecture - this is a languages' dept - once a week. In other words, adding it as a module to their main degree.

So things were agreed to keep the staff on as long as the above started next Sept... but wait a minute...

I am told that the lecturing staff have allegedly complained that it will be too stressful to move to this new way of working which, from what I can make out, actually means working.

So the uni has allegedly agreed that next student year there will be a phased move from the current system to the new one.

Personally, I would sack the lot. This is what our taxes are being spent on :angry: :angry:

Until we address things lik the above we are going to continue to be in dire financial straits yet those, such as the above staff, can carry on living their pretty lucrative lives whilst the rest of us pay for it.

[Executive Sadman]

Ahh, good, the McKinsey one updated.

Looks like we now have the dubious honour of being the first >500% debt:GDP economy.

Remember, those there cuts are 'ideological'

Well, if they even existed, that is...

[stormymonday_2011]

"Taking all debt together, private, public and financial sector, Britain (top orange line) is the most indebted nation in the world, far exceeding the eurozone countries now in so much trouble."

http://blogs.telegraph.co.uk/finance/jeremywarner/100010956/britains-deleveraging-nightmare-threatens-its-triple-a-rating/

Once deleveraging starts in earnest asset values will need to be broat down .. HPC here we come!

Bad news for the UK. Worse news for its creditors.

Edited July 20, 2011 by stormymonday_2011

[Oliver Sutton]

Are things even worse than this?

On the asset side much more of the Uks utilities etc have been privatised and are foreign-owned than most countries.

[yellerkat]

What he under estimates is the ability of the UK to switch direction on a sixpence so to speak. The Govt only needs to make some more slightly minor changes to some budgets which will make people more self reliant and the UK can become very efficient very quickly.

Hoorah! We're all saved.

[steve99]

What he under estimates is the ability of the UK to switch direction on a sixpence so to speak. The Govt only needs to make some more slightly minor changes to some budgets which will make people more self reliant and the UK can become very efficient very quickly.

In what way?, last time we had that was in Thatchers era which ended up creating a new class beneath working class called 'permanently unemployed' to which we are now entering the 3rd generation. ie once the industrial base was deleted for idealogical reasons. I suppose that 'some budgets' means 'at the lower end of society' and self-reliant means camping in the park and eating the Queens swans? or do you mean a one off tax for the real parasites in society, the bankers with offshore accounts, the mega rich who have never paid real tax, now that would be a minor change, along with a 6% interest rate hike to match inflation,. and a min wage to match the cost of living, eg 12 quid an hour?

[lebouche]

Comment #1 (when I looked)

" Ian Mortimer - minutes ago -

. Deport any foreign criminals immediately without appeal even if it means amending the Human Rights act. "

Sounds a little third reich.

Hows about an amnesty (declare yourself and be given the chance to explain your plans or government sponsorship for education in return for agreeing to work part time.

Then after a certain period a crack down.... No papers and out.... no right to 'council' in any sense of the word. However giving fair hearing to those who arrive and immediately declare their need to claim asylum at borders.

I think the fact that the bankers are turning into modern day pharaohs is more worrying that immigration. I was just thinking about it in those terms.

Mankind has a very short experience of this credit malarky. A blink of an eye in the human race's history. What if it REALLY isn't sustainable.

We have always had kings and lords and dictators. They have always taxed and lived in splendor. Are the new breed of kings the elite who have managed to discover and put to use the fact that if you'sell' money (i.e. lend)for more that it is worth (interest)then you make a tidy little profit, just so long as no one realizes that the only money you actually have is that of the repayments...which are technically worth more collectively in the long run than you have lent (providing people don't default!!) this loan repayment value can then be to borrowed against from a second banker, perhaps at a much lower interest rate-thus making it profitable for you both. Even though neither has any money....because the second banker borrows from the third banker or...better still...just adds the numbers to a computer...fabricating money, conjuring it out of a hat.

Is this how it works or am I on the wrong track?

What would happen though if no one payed their bills...surely civil war?

Is there any way for the UK for example to EVER pay off its debt?

[_w_]

Are things even worse than this?

On the asset side much more of the Uks utilities etc have been privatised and are foreign-owned than most countries.

I was driving behind a bus in Fulham yesterday and saw the following acronym: RATP

It stands for ... Régie Autonome des Transports Parisiens. The logo matches.

... those double deckers are now parisian buses.

Oh, and RATP are a French government owned company BTW. Is there anything we haven't sold yet?

Edited July 20, 2011 by _w_

[MrFlibble]

The time will come for a knock on the UK's door, when it's answered Mr Reality will be stood outside with a pick axe handle and a twinkle in his eye.

George 'rates lower for longer' Osborne seems to believe he has the problem in hand with his fake austerity and optimistic growth forecasts, from where I'm stood this fool looks to be the closest to the fan and there's a big collection of turds heading straight towards it.

[@contradevian]

Well I think the only way out of this is to default or for an asteroid to hit us. I'm hoping for the latter.

[scottbeard]

"Taking all debt together, private, public and financial sector, Britain (top orange line) is the most indebted nation in the world, far exceeding the eurozone countries now in so much trouble."

So if you ignore the asset side of the balance sheet and look just at the debt, Britain (as the biggest financial centre in the world) has more debt than the PIIGS?

The next line of the article is

There’s plenty of room for argument about the accuracy or even meaningfulness of such debt comparisons. Since most debt liabilities are backed by an equal and opposite value of assets...

[LuckyOne]

So if you ignore the asset side of the balance sheet and look just at the debt, Britain (as the biggest financial centre in the world) has more debt than the PIIGS?

The next line of the article is

The actual quote was :

Since most debt liabilities are backed by an equal and opposite value of assets, you might argue that it’s actually a rather good thing to have so much of the stuff, as it also indicates high comparative wealth.

There are two flaws to this argument :

1. Wealth is the amount by which assets exceed liabilities and not the absolute size of the balance sheet

2. The permanence of that wealth is a function of the stability of the value of the assets. I would argue that the value of many of the assets on the UK's balance sheet are in a very precarious position exposing currently assumed wealth to a lot of downside risk

[Nationalist]

The time will come for a knock on the UK's door, when it's answered Mr Reality will be stood outside with a pick axe handle and a twinkle in his eye.

George 'rates lower for longer' Osborne seems to believe he has the problem in hand with his fake austerity and optimistic growth forecasts, from where I'm stood this fool looks to be the closest to the fan and there's a big collection of turds heading straight towards it.

Sorry, but Mr Reality has a prior engagement in Greece, and then he's expecting to visit some other Med countries. He can't come to the UK any day soon, if ever.

The UK isn't totally fooked. We can live under the burden of our stupidly large national debt, rolling it over forever basically. What we can't live with much longer is the deficit. We need to balance the books promptly. Knocking £150bn off the budget will cause wholesale job loses in the public and private sectors and these will need to be mitigated by deporting millions of currently employed immigrants to free up jobs for our people. This will take balls, and I don't mean Balls. Unfortunately the government isn't anatomically correct.

Edited July 21, 2011 by Nationalist

[winkie]

Well I think the only way out of this is to default or for an asteroid to hit us. I'm hoping for the latter.

.....what is wrong with part default? Who lent the money to those knowing there would be difficulty in repaying and happily continue collecting the high income from that debt, thinking they will be protected...hoping if it continues to roll over and over, everyone is happy.....the problem being if you rely on debt to live you continually require a new supply...this is where we stand today....those that took the risk should stand some of the pain.

[MrFlibble]

Sorry, but Mr Reality has a prior engagement in Greece, and then he's expecting to visit some other Med countries. He can't come to the UK any day soon, if ever.

Don't say that, the UK desperately needs woken up and Mr Reality is just the man for the job.

The UK isn't totally fooked. We can live under the burden of our stupidly large national debt, rolling it over forever basically. What we can't live with much longer is the deficit. We need to balance the books promptly. Knocking £150bn off the budget will cause wholesale job loses in the public and private sectors and these will need to be mitigated by deporting millions of currently employed immigrants to free up jobs for our people. This will take balls, and I don't mean Balls. Unfortunately the government isn't anatomically correct.

Flipping the debt and letting inflation hose the creditors whilst promising growth seems to the the current game plan. It will work until the creditors get fed-up of being conned to and start asking for more interest. The sooner it happens the better, the current slow motion train wreck is boring my pants off.

[Traktion]

As the link in the OP points out, there are 'assets' backing that debt.

Whenever debt is created on one account, so is a matching credit on another. There is a whole pile of matching credit in bank accounts somewhere - it's impossible for there to be otherwise.

So who has it? Follow the money. There are some very rich corporations out there, as well as rich individuals.

Therefore, what we have is an imbalance of wealth, rather than a lack of wealth. How do you solve an imbalance? You shift money from those with a high net positive balance, to those with a high net negative balance. There happens to be a minority of the former and a majority of the latter - the wealth has accumulated at the top end, according to government statistics (http://www.statistics.gov.uk/cci/nugget.asp?id=2).

How do you shift said money? One way, is to allow defaults to unfold. This gives hair cuts to the rich, redistributing money towards the poor. This is how a free market would have dealt with the crisis, with no bias for the status of those involved.

There are many other ways, but taxation on assets is another, as is money debasement - these are decisions made outside of the market though, which inevitably means choosing between winners and losers, which is politically difficult.

Ofc, we are an imbalanced national economy, on the back of an imbalanced global economy. We need to get our own house in order first, thus allowing us to address the external problem. Ideally, both can happen at the same time (it's probably what would happen due to market forces).

The bottom line is - it's all about imbalances.

Edited July 21, 2011 by Traktion

[frenchy]

I was driving behind a bus in Fulham yesterday and saw the following acronym: RATP

It stands for ... Régie Autonome des Transports Parisiens. The logo matches.

... those double deckers are now parisian buses.

Oh, and RATP are a French government owned company BTW. Is there anything we haven't sold yet?

You are correct re RATP. The SNCF, EDF, Alstom and many other french companies have invaded the UK. The same goes with German companies and other countries.

So you know there isy no way the french would have allowed this to happen, but Britain did and it is very wrong IMO.

[tomandlu]

Knocking £150bn off the budget will cause wholesale job loses in the public and private sectors and these will need to be mitigated by deporting millions of currently employed immigrants to free up jobs for our people.

Define 'immigrants'. Define 'our people'. (I will let the definition of you define itself based on your answers...)

[I want a house!]

I was driving behind a bus in Fulham yesterday and saw the following acronym: RATP

It stands for ... Régie Autonome des Transports Parisiens. The logo matches.

... those double deckers are now parisian buses.

Oh, and RATP are a French government owned company BTW. Is there anything we haven't sold yet?

Britain sold it's soul many years ago, now the chickens will come home to roost.

[I want a house!]

Sorry, but Mr Reality has a prior engagement in Greece, and then he's expecting to visit some other Med countries. He can't come to the UK any day soon, if ever.

The UK isn't totally fooked. We can live under the burden of our stupidly large national debt, rolling it over forever basically. What we can't live with much longer is the deficit. We need to balance the books promptly. Knocking £150bn off the budget will cause wholesale job loses in the public and private sectors and these will need to be mitigated by deporting millions of currently employed immigrants to free up jobs for our people. This will take balls, and I don't mean Balls. Unfortunately the government isn't anatomically correct.

Sounds very right wing and a task that can never be accomplished unless you want us to become a police state. Good luck in hoping for that in the UK, this is a lefties paradise.

[winkie]