World Economic News
British Household Debt Nears 1 Trillion Pounds
British household debt grew by 11.1 billion pounds in April, taking total outstanding debt to 983 billion pounds. The debt should hit the 1 trillion pounds ($1.835 trillion) level later this month, according to the Bank of England.
A trillion pounds debt is equal to Britain's annual output, or the external debt of sub-Saharan Africa, Ibero-America, and Asia combined, noted the Financial Times June 2.
Household debt, which has doubled in 10 years in Britain, mostly under the New Labour operation, is at a record level in proportion to income. It is now at 120% of disposable income, up from 100% during the 1980s "boom." In France, household debt is 58.7% of disposable income.
The key "asset" on which this British debt rests, is housingan enormous financial bubble. Just over 50% of British families have "unsecured" debt of 6,500 pounds ($12,000) and two-fifths of families have "secured" debt 70,000 pounds ($130,000).
World Financial Outlook Very Dim
A leading City of London financial analyst told EIR June 2 that "every lever will be used to postpone the big crisis until after the U.S. elections. However, this might well not work," the analyst said. "You have various factors which could throw the whole calculation off course."
"You have the Middle East, which is an enormous mess," the analyst said. There is the housing bubble; the carry trade could unwind. And there is one other factor which has to be taken into account: If the market players knew that after November, the situation will get a lot worse, they could start acting now in a way that would upset the whole system. And that could turn off all the calculations."
The analyst noted that right now, "people are concentrating their attention on the oil situation. But it is not the only thing that could trigger things to fall apart."
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