Tuesday, July 14, 2009
This article draws comparisons with the 1992 crash and suggests that the current UK saving rate of 3% will rise to 10-12%. I am guessing that a consumer led recovery is off the menu. Even the UK government is on a timer before frantically deleveraging, when they will attempt to sell BoE debt, their banking shares, the Royal Mail and probably anything not nailed down. Cash is king. A savings rate of 10-12% is uncharted water with this much debt and falling wages/rising unemployment. 2016 is mooted as the trough. If this isn't the start of a deflationary spir al then what on earth do they look like?