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Global debt climbs towards fresh high as companies and countries keep on borrowing

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Another 12.6 billion jam today borrowed by the Government in November because we're worth it. Hope you younguns have got deep pockets when the piper calls.  Worse than thought, on track for worse than 15/16.

No war, seven years since recession, but still borrowing to keep the Ponzi going.

Edited by crashmonitor

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And we all know what happened to Italy after a Brownite social justice spending fest in the 1980s whence tipping point 85% public sector debt to GDP was reached. No escape from the debt trap and virtual zero growth ever since.

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We are fecked. If BoE does not raised interest rates next year, substantially then those of us who have saved are better off emigrating. My back up plan, to work abroad, I won't have to pay stupidly high rents, more spending power, easier children to teach, sun.

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35 minutes ago, zugzwang said:

Not really a question of when net debt hits 100% of GDP but how soon.

 

678.jpg?w=620&q=55&auto=format&usm=12&fi

You saw that in the FT too.

Not many people are aware yet, the UK is a very different country to what it was 10 years ago.

As far as Gidiot doubling the debt ... the chart plainly shows debt going from ~30%GDP in 2000 (when Brown stopped following Ken Clarkes spending poilcies, and moved to VoteForMe!' to almost 70% GDP in 2010, when the ConDems picked up the sh1t.

Amazing what a 12% budget deficit will do for a countries debt.

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28 minutes ago, crashmonitor said:

And we all know what happened to Italy after a Brownite social justice spending fest in the 1980s whence tipping point 85% public sector debt to GDP was reached. No escape from the debt trap and virtual zero growth ever since.

Thats scares me most about the current UK.

It smells so like italy did in the late 80s - bent gerontracy.

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2 hours ago, mathschoc said:

We are fecked. If BoE does not raised interest rates next year, substantially then those of us who have saved are better off emigrating. My back up plan, to work abroad, I won't have to pay stupidly high rents, more spending power, easier children to teach, sun.

Do you have a location in mind?

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25 minutes ago, EssKay said:

It's only a problem if you intend to pay it back...

 

I still think the only possible outcome is a globally co-ordinated sovereign debt default.

 

£435 billion of UK gov debt is covered by Bank of England. 

Bank of Japan has already promised unlimited QE and fixed 10 year yields at 0%

Central banks can (and if necessary will) retire whatever quantity needs to be retired. That after all is their job.

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Great. What about the other £1000bn+ ?

 

And whilst your second point is valid, it doesn't exactly inspire confidence in a currency or an economy if the central bank just "retire whatever quantity needs to be retired does it"? Just look at Zimbabwe.. 

 

 

Edited by EssKay

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On the basis that every debt must have a counterparty to whom the money is owed this is great news- there is now more wealth than ever before!

And here's the proof;
 

Quote

 

The Number Of Billionaires Is Higher Than Ever With A Combined Net-Worth Of $7.7 Trillion;

Once a rare breed, the number of people that have a net worth of over one billion has reached to 2473 in the year 2015. Wealth-X, a wealth insight and information forum revealed that this number is a new record while releasing their billionaire census recently.

Although the billionaire club is reaching new heights, the world still has just one of them for every 2.95 million individuals.

The forum also revealed that billionaires are continuing to get richer. The total worth of all billionaires has increased by 5.3% reaching a whopping $ 7.7 trillion. This amount is larger than the GDP of developed countries such as Germany, Japan, the UK or France.

 

http://www.australiannationalreview.com/number-billionaires-higher-combined-networth-77-trillion/

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Billionaires in the UK own £344bn.  Think what a 99% wealth tax could achieve in infrastructure spending.

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12 hours ago, crashmonitor said:

Another 12.6 billion jam today borrowed by the Government in November because we're worth it. Hope you younguns have got deep pockets when the piper calls.  Worse than thought, on track for worse than 15/16.

No war, seven years since recession, but still borrowing to keep the Ponzi going.

It was tapering off nicely, but the old voted for Brexit! In answer to your implied question....Gov is having to spend to stop the economy stalling post Brexit. 

Cameron/Osborne Moto was "Fix the roof whilst the sun is shining" 

May/Hammond - Sod the roof....grab a bucket and help me bail all this water out the house...we are flooded!

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11 hours ago, spyguy said:

You saw that in the FT too.

Not many people are aware yet, the UK is a very different country to what it was 10 years ago.

As far as Gidiot doubling the debt ... the chart plainly shows debt going from ~30%GDP in 2000 (when Brown stopped following Ken Clarkes spending poilcies, and moved to VoteForMe!' to almost 70% GDP in 2010, when the ConDems picked up the sh1t.

Amazing what a 12% budget deficit will do for a countries debt.

Wait....2000-2007 seems perfect in line with historical trend visible in chart. I wonder what could have happened in 2008? The one eye Scotsman has many faults, but his and Blair's response (along with US) are the reason we didn't have a depression. Did it come at a price? Was it cheap? These questions are debatable.....but it's necessity isn't.

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8 hours ago, EssKay said:

It's only a problem if you intend to pay it back...

 

I still think the only possible outcome is a globally co-ordinated sovereign debt default.

I doubt it. It far more likely the Government would raise taxes. Or simple crack down on corporate tax avoidance.

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7 hours ago, 80sBaby said:

Wait....2000-2007 seems perfect in line with historical trend visible in chart. I wonder what could have happened in 2008? The one eye Scotsman has many faults, but his and Blair's response (along with US) are the reason we didn't have a depression. Did it come at a price? Was it cheap? These questions are debatable.....but it's necessity isn't.

No.

You dont get a line like 2002-2007 that suddenly changes to 2008+.

The missing line is the increase in bank 'assets' and debt levels.

The UK economy 2000-2008 'looked' like it was doing consistently well. Then you notice that debts are going up 10%+ each to get ~3% of GDP growth. Massive credit bubble.

 

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I don't think I've ever felt more despondent or disillusioned as I feel right now, asset prices keep on rising, the global debt binge shows no signs of being brought to a halt, if anything, the most likely outcome imo will be some form of further QE funded debt forgiveness/helicopter money somewhere down the line... some would say that's already happening by stealth now with TC's for people who don't want to work more than 16 hours a week as well as cheap debt plus limitless govt subsidies for businesses that would otherwise have long since failed due to being unprofitable and uncompetitive.

 

It just seems like a never ending win-win-win scenario for the feckless, the spendthrifts, the debt junkies, the wealthy owners of assets and of course, the banks.... and there is no potential financial crisis or black swan event that can't be made to just disappear simply by firing up the printing presses and creating another few hundred billion.

 

I've never felt more like just heading to the nearest casino and putting my entire 6 figure house buying savings on black or red, because as it stands right now in terms of what it will get me, it's all but worthless anyway and I just don't see that changing any time in my life time, 

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9 hours ago, 80sBaby said:

Wait....2000-2007 seems perfect in line with historical trend visible in chart. I wonder what could have happened in 2008? The one eye Scotsman has many faults, but his and Blair's response (along with US) are the reason we didn't have a depression. Did it come at a price? Was it cheap? These questions are debatable.....but it's necessity isn't.

I should add that there was a massive economic boom going on 2002-2007, all fuel by about 20 years of debt being spent in 5 years.

Yet the UK debt was increasing like we were in a deep recession.

 

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4 minutes ago, Grumpysod said:

Government borrowing and personal borrowing have been evenly matched now for quite a while. It felt like only yesterday when shock horror we passed the 1 Trillion £ mark with both. Headlines were fearful, what was to become of us now we were all committed debt junkies. Anyway a short time passed and away we went continued borrowing  again fearless of the fact that we were now motoring to 2 Trillion £'s.

It is no longer news now for most, we are totally desensitised to frightening debt, what next 3 trillion, 4 trillion.......................... 10 trillion

 

Nobody seems to care anymore.

It's going to be one hell of a hangover.

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12 hours ago, 80sBaby said:

I doubt it. It far more likely the Government would raise taxes. Or simple crack down on corporate tax avoidance.

They'll try raising taxes but short of double digit rises in both income and corporation tax that won't put an appreciable dent in 1.5 trillion. It would also act as a further brake on economic growth - worsening the problem

 

Plan A was for inflation to take care of the problem, but in a zero/low growth world with historically low interest rates, that ain't going to happen - just look at Japan which is now approaching two decades of deflation.

 

So you're left with a situation where there is no credible way to repay the debt. Whenever that has happened throughout history there has generally been a reset for the nation(s) involved - either through war (creating the potential for growth afterwards) and/or a default.

 

In the current situation where you have most of the advanced economies up to their eyeballs in debt, the sensible option is actually to agree a co-ordinated sovereign debt default. 

 

For me me it's just a question of when, not if.

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14 hours ago, 80sBaby said:

It was tapering off nicely, but the old voted for Brexit! In answer to your implied question....Gov is having to spend to stop the economy stalling post Brexit. 

Cameron/Osborne Moto was "Fix the roof whilst the sun is shining" 

May/Hammond - Sod the roof....grab a bucket and help me bail all this water out the house...we are flooded!

The assumption therefore being that there are higher growth prospects tomorrow. Maybe 1% is as good as it is going to get from hereonin . We have actually doubled the debt at a time when our growth has been amongst the best in the developed world. Seven years  of growth beating most of the developed world, no recession, no war. So what the hell was it all about, other than the public assuming the government could provide more than the economy could really stand.  Brown set a high bar based on perceived growth of about 3-4%, we have done 1-2% which is better than almost all of Europe and on a par with the States.

 

Should have played out the ecomic cycle cycle John major style back in 2007-2012, we would now be looking at a solid recovery, less government debt and assets young people could afford.

Edited by crashmonitor

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