(adapted graph from Calculated Risk) - click on image to enlarge
Wednesday, April 14, 2010
3 comments:
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Looks like 2000 was where it started to go wrong. I always said we should (based on previous UK economic history) have had a recession then. Traditionally inflation would have started to pick up, rates would have had to rise, kicking over the punchbowl. Instead we had cheap Chinese imports and a dodgy inflation index courtesy of Gordon Brown, who believed his own hype. The boom would continue forever. I remember serious articles circa 2005/6 predicting average house prices reaching 300-400K within 10 years. I thought it was mad then. It looks insane now.
ReplyDeleteIsn't all of this debt just a way to hide the underlying inflation?
ReplyDeleteSobers: the graph is for the US, it seems harder to get info like this for the UK but I guess it's similar. Then we need to add on growth of government debt - this from last year compares US & UK total indebtedness:
ReplyDeletehttp://usdcrisis.com/wp-content/uploads/2010/01/23106.jpg
- it seems "financial debt" is the real shocker.
Paddington: I think the growth of personal debt is a result of deflation (or no-real-growth) of median wage rates.