Consumer Debt Measured Against Gdp

[lufc]

This might be stating the bleeding obvious but .....

In Dec 1993 total consumer debt (£412 bn) accounted for 64% of GDP (£645 bn).

Fast forward to Dec 2007 and total consumer debt (£1,407 bn) accounted for 102% of GDP (£1,381 bn).

I can only find Boe data going back to 1993 but the measure seems to be fairly consistent at 64% to 67% until 1999 and then blast off !!!!

It would seem from recent months the only things that have kept this oustanding debt growing are re-mortgaging and unsecured lending as approvals for new mortgages have fallen away.

My question is, as the UK starts to experience its own foreclosure problems and subsequent banking writeoffs as I assume it must, will this outstanding debt follow the lead of GDP and actually start to contract ???

[winkie]

This might be stating the bleeding obvious but .....

In Dec 1993 total consumer debt (£412 bn) accounted for 64% of GDP (£645 bn).

Fast forward to Dec 2007 and total consumer debt (£1,407 bn) accounted for 102% of GDP (£1,381 bn).

I can only find Boe data going back to 1993 but the measure seems to be fairly consistent at 64% to 67% until 1999 and then blast off !!!!

It would seem from recent months the only things that have kept this oustanding debt growing are re-mortgaging and unsecured lending as approvals for new mortgages have fallen away.

My question is, as the UK starts to experience its own foreclosure problems and subsequent banking writeoffs as I assume it must, will this outstanding debt follow the lead of GDP and actually start to contract ???

Talk around it, walk around it, fiddle it, wangle it, manipulate it, inflate it or deflate it......we either pay it or write it off....after all it is only money.

[council dweller]

This might be stating the bleeding obvious but .....

In Dec 1993 total consumer debt (£412 bn) accounted for 64% of GDP (£645 bn).

Fast forward to Dec 2007 and total consumer debt (£1,407 bn) accounted for 102% of GDP (£1,381 bn).

I can only find Boe data going back to 1993 but the measure seems to be fairly consistent at 64% to 67% until 1999 and then blast off !!!!

It would seem from recent months the only things that have kept this oustanding debt growing are re-mortgaging and unsecured lending as approvals for new mortgages have fallen away.

My question is, as the UK starts to experience its own foreclosure problems and subsequent banking writeoffs as I assume it must, will this outstanding debt follow the lead of GDP and actually start to contract ???

GDP is a matter of opinion but the debt is real(ish).

[A.steve]

GDP is a matter of opinion but the debt is real(ish).

Not quite, but I see where you're coming from. GDP can be manipulated... the most obvious way, by encouraging debt... and GDP does not necessarily represent productive activity - so, bureaucratic overheads financed on debt are a great way to boost GDP.

[wheresitgone]

I thought that increases in house prices somehow found their way into the GDP figures. Am I wrong?

[InternationalRockSuperstar]

My question is, as the UK starts to experience its own foreclosure problems and subsequent banking writeoffs as I assume it must, will this outstanding debt follow the lead of GDP and actually start to contract ???

[lufc]

See this great graph in this link....http://news.goldseek.com/GoldSeek/1216926180.php

Thanks very much folks, most informative graphs, lets see what happens when we (America)hit "zero hour" .... IMHO it will be upon us way before 2015.