Showing posts from tagged with: Australia

Stable Growth likely to Continue

Posted by Tim Congdon in News Archive | 0 comments

In my last monthly e-mailed note (on 28th June) I said that money growth patterns in the four leading advanced country jurisdictions (USA, Eurozone, Japan and the UK) were more or less perfect. To recall, “4% a year is a more or less ideal rate of broad money growth in developed countries, with a trend rate of output growth of 1% - 2% and an aim to keep inflation around 2%. Amazingly, and no doubt more by happenstance than design, 4% a year is at present common to the USA, the Eurozone, Japan (just about) and the UK.” Well, not much has happened since then to alter the assessment. The picture is as follows,2016-08-25_11-45-20The numbers  for China and India, the two big developing countries (both with trend growth rates of output of over 5% a year), are as follows2016-08-25_11-47-55  

Rather obviously, the world in its entirety cannot be in debt, let alone drowning in the stuff

Posted by Tim Congdon in Article Archive | 0 comments

debtDebts have continued to build  up over the last eight years and they have reached such levels in every part of the world that they have become a po- tent cause  for mischief,” according to William  White, former chief  economist at the Bank  for International  Settlements in  an interview for the Daily Telegraph on January 20. According to White, “the situation is worse than it was in 2007.  Our macroeconomic ammunition to fight downturns is essentially all used up.” White’s pessimism chimes with warnings from Goldman Sachs last year. Andrew Wilson, chief executive of one of its fund management businesses, was reported on May 26, again  in the Daily Telegraph, as saying  that excessive debt represents “a risk to economies” and is a “major issue”. Specifically,  in mature industrial nations populations are ageing  and  the proportion of working-age people to the total population is falling, presenting “us” with the question of how “we” are “going to pay down the huge debt burden”. The combination of the Bank for International Settlements, Goldman Sachs and the Daily  Telegraph ought to be intellectually overwhelming. But they have  indulged in rhetoric and used words sloppily.  To whom does “us” refer? Who exactly are “we”? And, although the image of “the world drowning in debt” is often invoked, what is it supposed to mean?  

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