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Countries, Companies And Households Have Never Been More Indebted

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On the BBC live business news is snippet, featuring a quote from Legal & General Investment Management's Ben Bennett

While many market analysts seem to think an interest rate rise in the not-too-distant future is likely, "it's difficult to know how economies will react", because countries, companies and households have never been more indebted, says Legal & General Investment Management's Ben Bennett. "There is a fair risk (say 20-30%), that either the first sniff of higher interest rates knocks out the recovery, or that growth simply stalls once again"

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The so called recovery is an illusion. GS are predicting 3% growth according to todays Editor Letter in City AM. The whole thing ignores the fact that the UK government is still running a £100Bn deficit.

The stupidity of borrowing even more money to speculate on HPI is breath taking. A second bank crash now looks unavoidable.

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Indebted to whom, dear boy?

To the fact that globalism requires high levels of debt in the west to balance things out, income-wise

How much debt does the average chindian worker have?

Not much.

How can we be called rich countries, when the average person is the opposite of rich?

20130602_debt2.jpg

Edited by Reck B

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The so called recovery is an illusion. GS are predicting 3% growth according to todays Editor Letter in City AM. The whole thing ignores the fact that the UK government is still running a £100Bn deficit.

The stupidity of borrowing even more money to speculate on HPI is breath taking. A second bank crash now looks unavoidable.

No, it's far worse: Seventies style stagflation followed by a sovereign debt default.

As ever, the wretched Japanese should be our guide.

...the International Monetary Fund (IMF) has warned Tokyo that it must follow through on promised economic reform and said it may need to keep up its stimulus drive for an "extended period".

Fears that the recent sales tax rise would dent a recovery in the world's number three economy have boosted speculation that the Bank of Japan (BoJ) would be forced to expand its monetary easing campaign to counter any downturn.

"The BoJ should act quickly if actual or expected inflation stagnates or growth disappoints," the Fund said in its annual review of Japan's economy.

"The current aggressive pace of monetary easing may need to be maintained for an extended period."

Last month, the IMF cut its growth forecast for Japan's economy this year and its comments today were likely to heap renewed pressure on Mr Abe before he releases a fresh update to his economic growth plan next month.

http://www.telegraph.co.uk/finance/economics/10864277/Japans-inflation-at-highest-rate-for-23-years.html

Edited by zugzwang

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To the fact that globalism requires high levels of debt in the west to balance things out, income-wise

How much debt does the average chindian worker have?

Not much.

How can we be called rich countries, when the average person is the opposite of rich?

20130602_debt2.jpg

globalism doesnt require high levels of debt in the west, the Wests inability to compete requires debt accumulation, is that a bad thing not being able to compete, No, unless the West is willing to sacrifice its entitlement. Fortunately people only give a sh@t about tomorrow, long term is someone elses problem, hopefully

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Lest we forget that Osborne's economic plans, confirmed by the OBR, are dependent on households increasing their debt:income ratios by 200 basis points over the next 5 years.

To spell it out- a further fifth of nominal household income taken as debt, plus all nominal pay rises mirrored in debt too.

Equates to approximately £150/month for five years straight iirc.

Little chance of it happening imo. What then...?

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globalism doesnt require high levels of debt in the west, the Wests inability to compete requires debt accumulation, is that a bad thing not being able to compete, No, unless the West is willing to sacrifice its entitlement. Fortunately people only give a sh@t about tomorrow, long term is someone elses problem, hopefully

Oh it does. Or more correctly, China's ability to grab demand requires it to ensure the West runs trade deficits.

They're rapidly running out of rope..........

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Lest we forget that Osborne's economic plans, confirmed by the OBR, are dependent on households increasing their debt:income ratios by 200 basis points over the next 5 years.

To spell it out- a further fifth of nominal household income taken as debt, plus all nominal pay rises mirrored in debt too.

Equates to approximately £150/month for five years straight iirc.

Little chance of it happening imo. What then...?

for some strange reason self interested people believe self interested people, why not become a democracy, then at least the failure can be widespread instead of blaming Labour or Tories or the queen or any other naturally self interested entities for the peoples failure

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Oh it does. Or more correctly, China's ability to grab demand requires it to ensure the West runs trade deficits.

They're rapidly running out of rope..........

Nope the West ensures it runs a trade deficit because it benefits, it could implement Capital controls yesterday if it truly wants to, it doesnt want to, it never did want to because of the economic rent it collected, its more open to it now and will be even more open to it tomorrow because the economic rent has started to be collected on the very population that were collecting it

Edited by Georgia O'Keeffe

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To the fact that globalism requires high levels of debt in the west to balance things out, income-wise

How much debt does the average chindian worker have?

Not much.

How can we be called rich countries, when the average person is the opposite of rich?

20130602_debt2.jpg

Germany unwavering 2002/2007/2012

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The so called recovery is an illusion. GS are predicting 3% growth according to todays Editor Letter in City AM. The whole thing ignores the fact that the UK government is still running a £100Bn deficit.

The stupidity of borrowing even more money to speculate on HPI is breath taking. A second bank crash now looks unavoidable.

If in the rest of the economy debt is being reduced then the state has to run a deficit. This can be done until all non state debt is settled, i.e. indefinitely, it is not a problem..

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