The debt bubble

The world debt has doubled since 2007 and despite its recent apparent deceleration mainly due to growing loss of solvency , it will continue growing at a pace that will further make it impossible to ever find a way to return to some sort of balance in economic accounts .

For the world to recover somehow , it would be necessary that U.S. , Japan and Europe would grow at least at 3.7 % persistently during no less than the next 12 years , with inflation held below 2 % , while China should grow at no more than 8 % mainly on a very strong increase of domestic consumption and a GINI indicator below 0.40 .

The realistic scenario should be instead that a reestructure of debt ( at least on maturity terms ) at world level would take place , because inflation will show earlier than sustainable growth and rates will have to go up . I canot see any recovery without first introducing changes in the currency pattern with dollar being complemented with euro ,yen and yuan .


Published in: on diciembre 21, 2012 at 11:02 am  Comments (3)