Ten years from the day of Lehman Brothers crisis

Today, it has been a decade since Lehman Brothers crisis occured. It seems that economic circulation is heading to another collapse of the world economy and finance system. I am least scholar of economics/finance but am still concerned about what is going on in the world.

The Institute of International Finance announced that at the end of March this year, the total debt in the world is up to 247 trillion USD. It has increased by 75 trillion USD, that is, 43 % from that in 2008.

On the other hand, the increment of the total GDP in the world remained 24 trillion USD, that is, 37 % increase. It means the debt per GDP in the world has increased from 2.9 times to 3.2 times. The funds from the debts have been invested to the assets. The economic growth rate remains low. The investments to the assets have been handled by so called the shadow banks like hedge funds. The funds are travelling instantly throuth the internet for further profit. It would contribute less to the manufacturing industries.

This has caused the inequality of income among people. Without the economic growth proportinate to the debt increase, the process inevitably causes the economic disparity.

It seems the collapse of the world economy may arise from the developing countries or from the rupture of the asset bubble in the developed countries. I don't know or could not predict how it occurs. I am very afraid the credit crunch must be really disastrous due to the size of bubble. I don't think the governments won't utilize the quantity easing for such a situation any longer.

For the past several decades, economic collapses have occured in 10 year interval as you may know. Be careful about such that.

No comments:

Post a Comment