Posted on 09/28/2009 8:18:54 AM PDT by h20skier66
"A mere $400bn went missing in the UK debt-savings boom of 2000-2008. Not to worry..."
SEEMS WE'RE NOT the only ones trying to figure out this week where the last decade's record consumer borrowing went.
"Where did all the debt go?" asked Bank of England economist Spencer Dale in a speech this Thursday in Exeter. Sadly for US and British households, however, let alone savers and investors, he had fewer answers than even we do here at BullionVault.
"Household debt as a proportion of income increased from 100% to 165% in the 10 years to 2007," Dale noted of the United Kingdom. "[Yet] this big run up in debt was not used to finance a surge in spending," he added, as if taking his cue from our Wednesday essay, Economic Dark Matter, and scribbling his speech the next morning as the train crawled through Reading.
"Where did it all go?"
Where indeed...? Because as the chart shows, the surge in Britain's household debt ratio starting 10 years ago coincided with a marked slowdown in consumer spending growth.
In the US, the same picture...with personal indebtedness ticking higher from the same point in time, too. Which hardly seems fair. Just imagine! Borrowing a record multiple of gross income - fully 120% in the US by 2007...and a whacking 170% by the start of '09 here in the UK - just to ease up on discretionary spending.
(Excerpt) Read more at commoditynewscenter.com ...
Vacations, home remodeling, cars, boats, toys, etc. Does it take a PHD in Economics to figure THIS out?
I thought it was only those of us in the U.S. that went on materialistic binges...hehe
That money is now going to something REALLY useful: debt servicing.
Yee-haa..it's a service economy!
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