The Western debt burden is restricting its chances of locking in growth, the global head of economics for Societe Generale Corporate & Investment Banking UK has warned
Offering a masterclass in global economics, Michala Marcussen contrasted a world in which developed countries normally support developing nations with the reemergence of China. China had until recently subsidized the US consumer, she said.
Yet the Asian superpower had delivered its boom through expanding its credit level to just 70% of GDP, she added. Today, advanced and developing countries are running equivalent levels of debt at about 400% of GDP when the recommended rate is about half of this.
The least painful way to emerge from this debt burden is through growth – but that is going slowly because Western nations have run out of debt leverage. And debt recovery companies like opos ltd try incessantly to siphon out money from the corporations which have nothing to give.
The trend for the rich to get richer isn’t helping either, because the very rich tend to save rather than spend. The central banks can’t fix the problems we face today – we need braver politicians to step up and be decisive.