We're riddled with debt... but the cure is a killer


	We're riddled with debt... but the cure is a killer

JICWyllie

7-6-2008 1:08 PM

66 views

tags:

economy, consumers, i-debt, i-crisis, currencies, i-interest rate, i-policy, i-risks

JICWyllie says:

Asset deflation + expenditure inflation = insolvancy

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://www.clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/db3d54d2-2cb7-42b6-91d2-946a9b829a6e/DEF771A2-B59A-4687-93BD-B03D76255AE2/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.independent.co.uk/news/business/analysis-and-features/were-riddled-with-debt-but-the-cure-is-a-killer-860815.html" href="http://www.independent.co.uk/news/business/analysis-and-features/were-riddled-with-debt-but-the-cure-is-a-killer-860815.html" style="font-size: 11px;">www.independent.co.uk</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.independent.co.uk/news/business/analysis-and-features/were-riddled-with-debt-but-the-cure-is-a-killer-860815.html">the day of reckoning is approaching</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.independent.co.uk/news/business/analysis-and-features/were-riddled-with-debt-but-the-cure-is-a-killer-860815.html">In Britain, personal, household and company debt has risen to extraordinary levels, while public-sector borrowing is now approaching the historic highs of the 1980s.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.independent.co.uk/news/business/analysis-and-features/were-riddled-with-debt-but-the-cure-is-a-killer-860815.html">Total UK personal debt (including secured and unsecured lending) at the end of May stood at £1,443bn, 8 per cent up on the previous 12 months.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.independent.co.uk/news/business/analysis-and-features/were-riddled-with-debt-but-the-cure-is-a-killer-860815.html">The UK's overall household debt sits at 109 per cent of GDP – the highest of the big five Western European countries and the highest in the G7. </blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.independent.co.uk/news/business/analysis-and-features/were-riddled-with-debt-but-the-cure-is-a-killer-860815.html">This line was crossed last year when, for the first time, our debt burden exceeded our GDP. </blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.independent.co.uk/news/business/analysis-and-features/were-riddled-with-debt-but-the-cure-is-a-killer-860815.html">the household savings ratio – a measure of the take-home pay we save – has dropped to 3.1, so low that we have to go back to 1959 (which had a rate of 1.5) to find a worse situation. Even more worrying, the first quarter of 2008 saw the rate drop even further to 1.1. </blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.independent.co.uk/news/business/analysis-and-features/were-riddled-with-debt-but-the-cure-is-a-killer-860815.html">The corporate sector is, if anything, more financially extended than the domestic.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.independent.co.uk/news/business/analysis-and-features/were-riddled-with-debt-but-the-cure-is-a-killer-860815.html">the real risk is not inflation, but deflation.</blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/DEF771A2-B59A-4687-93BD-B03D76255AE2/blog/" title="blog or email this clip"><img src="http://content9.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>