Commodity Trade Mantra

Posts Tagged ‘Deleveraging’

Why the Coming Wave of Defaults Will Be Devastating

In an economy based on borrowing, loan defaults & deleveraging matter. Defaults mean loans & bonds won’t be paid back. The owners of the bonds & debt (mortgages, auto loans, etc.) will have to absorb massive losses. Having unleashed tens of trillions of dollars in new credit since 2008, the central banks have simply increased the likelihood & scale of the coming default conflagration.

Combination Of Record Debt And Slowing Growth Makes New Global Crisis Imminent

One of the Geneva Report’s main contributions is to document the continued rise of debt at a time when most talk is about how the global economy is deleveraging, reducing the burden of debts. The report documents the continued rapid rise of public sector debt in rich countries and private debt in emerging markets, especially China.

Will Consumer Credit Drive The Next Economic Boom

The age of “easy credit terms” and “no money down” led to a consumption boom that offset a decline in actual economic productivity, incomes and savings. Of course, the basic lesson of economics is that it is savings that ultimately leads to productive investment, production and economic growth.

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