Monthly Archives: August 2014

The World Economy and Humanity

The world economy is heavily indebted. As Ambrose Evans-Pritchard points out, the last 15 years of central bank easing has driven total debt ratios to a record 275% of GDP in rich states and 175% of GDP in emerging markets.

At the local and individual level, where easing is not possible, any meaningful debt reduction is achieved by defaulting. As McKenzie Global Institute points out, the drop in US household debt between 2008 and 2012 is primarily explained by defaults on home loans and consumer debt (Roxburgh et al 2012).

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