Jul
8th
Thu
8th
Economist and FT on Private Deleverage vs Public Borrowing
Martin Wolf explains why extra government borrowing will be met by increased private (mostly corporate) savings, à-la Japanese lost decade. In general it makes a lot of sense, even though it makes two strong assumptions:
- the somewhat paradoxical net flow of capital from developing to mature countries via reserve accumulation and currency manipulation will continue indefinitely
- dollars and pounds will still be considered a safe heaven
On private corporation deleverage, The Economist has a good article on this week print edition (“Show us the money”) on increased cash generation by US and UK companies, due to lower investments.
Tags:
finance economics government debt US UK japan savings investment deflation deleverage FT economist martin wolf
