[WORKERS REVOLUTIONARY PARTY] Wednesday, 8 October 2014 - TODAYS NEWS LINE EDITORIAL: GENEVA REPORT ISSUES DIRE WARNING! The 16th Annual Geneva Report says that interest rates will have to stay low for a ‘very, very long’ time to let people, companies and governments pay down their ballooning debt loads, or the world will be thrown into another financial crisis. The report has been published just as the sharp divergence between the growing US economy and the declining German and EU economies is fuelling a growing panic...It estimated total debt of all kinds (government, corporate and consumer) at a record 212 per cent of annual global gross domestic product, up from about 185 per cent in 2008! While the world’s advanced economies have curbed the pace of debt accumulation since the crisis, emerging markets have accelerated debt growth amid historically low global interest rates – with China leading the way. It adds: ‘This group of countries are a main source of concern in terms of future debt trajectories, especially China and the so-called “fragile eight” (Argentina, Brazil, Chile, India, Indonesia, Russia, South Africa and Turkey), which could host the next leg of the global leverage crisis,’ the authors said. It adds that the advanced economies are caught in a ‘vicious loop’ of high debt and slow growth. It finds that debt reduction through austerity reduces spending and thus slows growth; slower growth reduces incoming revenues and thus limits the ability to reduce debt. [READ MORE]
Posted on: Wed, 08 Oct 2014 09:10:17 +0000
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