Looming first world debt crisis

Louis Proyect lnp3 at panix.com
Wed Sep 10 07:41:57 MDT 2003


IMMINENT FIRST WORLD DEBT CRISIS WORSE THAN ‘THIRD WORLD’

ECONOMY REACHING ‘TIPPING POINT’ - MIDDLE CLASS CONSUMERS WILL CARRY THE 
CAN FOR FINANCIAL COLLAPSE

A new annual report on the global economy published by nef  today, 
Monday September 1st, predicts that a giant credit bubble, created by 
globalisation’s decades of ‘easy money’, has now reached a “tipping 
point” – a point that has historically triggered financial crises.

Ground-breaking new analysis in the report – titled Real World Economic 
Outlook - shows that Japan’s financial crisis was triggered in 1990 when 
the total stock of financial assets began to outstrip GDP by nine times.

Two of the world’s richest countries, the US and UK have followed 
Japan’s example, inflating the credit bubble and the accumulation of 
financial assets through de-regulation and reckless lending and 
borrowing. This bubble has been fuelled further by the decisions of 
Central Bank governors and their boards to lower interest rates to 
historically low levels.

Jubilee research at nef, the team that spearheaded global awareness of a 
third world debt crisis, are releasing provocative new research into the 
first world’s huge debts. This shows that credit and other paper 
‘promises to pay’ now exceed  levels of real income (GDP) by ten times.

Recent stock market falls, drastic though they have been, have barely 
dented the credit superstructure. When this credit bubble bursts, the 
report concludes, it will be middle class consumers in both the US and 
UK that will bear the brunt of the financial crash.

full: http://www.neweconomics.org/gen/news_rweobubble.aspx

-- 

The Marxism list: www.marxmail.org



~~~~~~~
PLEASE clip all extraneous text before replying to a message.



More information about the Marxism mailing list