Is there an end to the turmoil?
The Dow is plumbing the depths as are most of the markets, in emerging or developed economies. There are various commentators with different perspectives.
The commentaries that interested me are shared here.
To summarise here are some interesting factoids from that file:
UK Borrowing/GDP > 300%
UK Gross foreign current liabilities/GDP > 300%
UK Banking funding gap (at Dec 2008) ~ £780 b – may go over £1000b
To put things in context globally, worth having some of the global (rounded estimates) GDP figures to hand:
- US GDP = $14 t (trillion)
- UK GDP = $3t
- Japan GDP = $4.4t
- China GDP = $3.3t
- Germany GDP = $3.5t
- Italy GDP = $2.5t
- India GDP = $1.1t
- France GDP = $2.7t
- Brazil GDP = $1.3t
Overall Global total = $60-80 t.
So if you just look at US and UK, there is a total borrowing of over $50t in the economy – at approx 3x GDP – Wow! That is a large number to get your head around.
And who is going to be paying that debt down?
Either taxation in those countries (ie Mr Joe Taxpayer himself) or inflation (Mr Banker floods local cash into the market). Either way the future looks dire. Brace yourself – hopefully this is just a roller coaster and not a runaway train ….