Borrowing putting UK at risk of collapse

Graham_Devon

http://www.insider.co.uk/news/government-borrowing-uk-crisis-venezuela-11618542

A Bank of England external policy maker has warned the UK cannot afford to borrow more without jeopardising its financial stability.

Richard Sharp, a member of the Bank of England's Financial Policy Committee said the UK government has borrowed £1 trillion since the 2008 banking crisis and borrowing more could put the country at risk of collapse similar to that seen in Venezuela.

Mr Sharp, a former head of Goldman Sachs European investment business, made the comments days after Chancellor Philip Hammond agreed to extend the cheap credit scheme for banks by another £25 billion to £140 billion.

An interesting article, but more importantly, it's who is saying these things that stood out to me. The very people with the control - but the very people that continue to do absolutely nothing about anything other than continual warnings.

Anyway, this thread has two strands:

1. The article is quite interesting

2. There doesn't appear to be any discussion on this forum anymore, other than what I can only describe as "out there" random threads basically outlining ones personal obsession with a particular forum name.....on another forum. Plus one member still trying to convince himself that there is not, and will never be such a thing as a high house price and that everything is affordable to every man and his dog so long as they tick 459 unique boxes, including earning average wage at the age of 18 months old.

So, anyone left? Or has the forum simply been overtaken by this claptrap and everyone, including myself, got utterly bored with it?

It's Christmas! Wheres the quiz? Where's Hamish with his new year prediction? I've done my bit and highlighted the Venezuela type crash!

Eric_the_half_a_bee

Obviously he is not including "borrowing to invest" in that. We all know that pays for itself.

economic

What matters is not the absolute amount of debt, but rather the debt to gdp ratio.

If we get accelerating growth for a number of years suddenly the debt burden becomes a lot less, and we are back to "normal".

The question is if GDP growth will accelerate.

also we are no where near like Venezuela. We have a comparatively strong political system, stable inflation, high employment, non-existent poverty, better infrastructure, much more efficient capital markets and a stable currency.

patman99

The current Chancellor was happy to state that borrowing will reach it's limit in 2020. At which point repayments will equate to 91p for every £1 the Govt. Earns. He also pointed out he was happy with this.

By 2020 GDP may well have grown enough to cover all the Govt outgoings to the point that they have spare money to overlay the loans they have taken out to cover the shortfalls if previous years. If GDP fails to increase, then Taxes will rise to cover the gap instead.

steampowered

I find articles like this very insular. You can't just look at the UK.

Yes debt is a problem, but there are plenty of other countries with much higher debt. Most developed economies have similar levels of debt to the UK.

There is a big gap between the UK and Venezuela! Our economy does not rely on oil for more than 50% of our GDP, for one thing ...

I don't hear anyone bleating on about how Japan (which has much higher debt than the UK) is about to become the next Venezuela.

I also suspect the article is inaccurate. The quote from Mr Sharp did not say anything about Venezuela. I suspect the Venezuela reference was added by the website to sensationalise the matter.

michaels

Who the debt is owed to matters - in Japan it is owed to Japanese pensioners so the country itself has no net exposure requiring foreign investors to have confidence that they will get their money back.

The UK is different we have a 'twin deficit' with the balance of payment salso being strongly negative which has moved our net assets from positive to negative in recent years. This matters because for us to continue to consumer more than we produce (= the trade deficit) we need to borrow from abroad. If the foreign lenders decide they may not get their money back then no more loans and suddenly we have to manage with 5% less gods than we do now - so less food, less energy, less medicines. IE much more like Greece than Japan.

Don't worry, Corbynistas, pushing up the deficit by borrowing to invest in higher public sector salaries will in no way damage international confidence in the UK economy....

Crashy_Time

Graham_Devon wrote: »

http://www.insider.co.uk/news/government-borrowing-uk-crisis-venezuela-11618542



An interesting article, but more importantly, it's who is saying these things that stood out to me. The very people with the control - but the very people that continue to do absolutely nothing about anything other than continual warnings.

Anyway, this thread has two strands:

1. The article is quite interesting

2. There doesn't appear to be any discussion on this forum anymore, other than what I can only describe as "out there" random threads basically outlining ones personal obsession with a particular forum name.....on another forum. Plus one member still trying to convince himself that there is not, and will never be such a thing as a high house price and that everything is affordable to every man and his dog so long as they tick 459 unique boxes, including earning average wage at the age of 18 months old.

So, anyone left? Or has the forum simply been overtaken by this claptrap and everyone, including myself, got utterly bored with it?

It's Christmas! Wheres the quiz? Where's Hamish with his new year prediction? I've done my bit and highlighted the Venezuela type crash!

This forum lost it`s way a long time ago (I think it was always just a place to keep the "I hate HPC" special people away from the general forum) The charts and discussion on HPC are fascinating just now BTW. The fact that the MSM are screaming "Bubble" every day will make most of them not want to bother anymore, what`s the point? Hamish having his home town become Crash Central was pricelessly ironically funny though.....:rotfl:

GreatApe

Crashy_Time wrote: »

This forum lost it`s way a long time ago (I think it was always just a place to keep the "I hate HPC" special people away from the general forum) The charts and discussion on HPC are fascinating just now BTW. The fact that the MSM are screaming "Bubble" every day will make most of them not want to bother anymore, what`s the point? Hamish having his home town become Crash Central was pricelessly ironically funny though.....:rotfl:

People here are not obsessed with house prices its just a side show. The market will move the way the market will move no amount of hate or love will change it.

The loons over at hpc of course spend most days hating the world for not conforming to their confirmation bias predictions.

chucknorris

GreatApe wrote: »

People here are not obsessed with house prices its just a side show. The market will move the way the market will move no amount of hate or love will change it.

The loons over at hpc of course spend most days hating the world for not conforming to their confirmation bias predictions.

There is someone who has posted on this thread who is obsessed with house prices, and I'm sure you know who it is.

mayonnaise

Merry Christmas, Graham.

Crashy_Time

GreatApe wrote: »

People here are not obsessed with house prices its just a side show. The market will move the way the market will move no amount of hate or love will change it.

The loons over at hpc of course spend most days hating the world for not conforming to their confirmation bias predictions.

The world seems to be on their side at the moment ...


http://www.bbc.co.uk/news/business-42344170