This made the rounds on the internet yesterday, and here’s my take.
- The US fiscal cliff is the wolf in the pen. Pretty much a third of external debt shown, eclipsing Germany, the UK and Japan… combined. External debt of 101% of GDP… worrying. If I would be UK, France or Germany (in that order) I would be scared. Very Scared.
- Besides the US exposure, Japan is limiting its’ exposure and others make up less than 25% of total shown.
- Except for a recession, remind me why Spain is worse than France, which arguably has earned a recession with its’ current system and politics?
- Germany isn’t really that much of a patron saint. Surely it is having a TARGET2 balance in the region of €700 billion to collect, but you’re still looking at six times that in foreign debt which is 176% of GDP and government debt is around half of that number, at 83% of GDP.
- It’s the BBC, so of course there is “No Problem” with 436% foreign debt to GDP and 81% government debt to GDP as long as it is the UK. Because it’s a financial centre (Writing past this stage took me a while after recovering from laughter. Why except for government/central bank guarantees to financial companies is any of this “safe”?) and because they hold “highly valuable” “assets” abroad. Or otherwise I guess there will be executive order to manipulate LIBOR to the benefit of the UK. Where did all these assets go for Japan?
Good and insightful, if arguably hilarious due to certain biases.