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(Note: This is not just government debt, but consolidated debt (financial, non-financial, government and household))
that means that for every pound of GDP the UK produces, it has 9,5 pounds of debt.
and the plucky everyman Aussie flips him a 20p piece and tells him not to worry about it?
I think it was for Castlemaine XXXX or Fosters.
A man was buying a Rolls-Royce and wanted to pay in cash, but he found he was 2p short of the 15,000 needed. Outside the car showrooms he saw a man selling newspapers, and he went out and asked him:
"Could you lend me 2p? I want to buy a Rolls-Royce."
"Sure," replied the man. "But look – here's 4p. Buy one for me as well."
Newspaper sellers are well stupid
Not really sure why it has to be newspaper seller, tbh. I just copied and pasted without properly reading through.
UK's GDP in 2010. was around $2.8 trillion. If the UK really has a debt to GDP ratio of 950%, that means that the total debt of the UK is $26.6 trillion.
You really think that the UK has at least $26.6 trillion in assets?!
I don't know why people are worrying
I don’t know how a debt to asset ratio of 4:1 compares with other nations. It might be quite reasonable.
Separate from Govt. debt so does that mean it's private debt?
Either way, what is that? It's saying we owe everyone else but no one really owes us money?
It's an odd chart, all in all. Doesn't really seem to tell us anything in detail.
It is showing total debt, and yes that is private from what I can skim read.
The problem with this graph is it is a bit useless without other financial data, as people have said upthread, this is consolidated debt, not net debt which (rightly or wrongly) is usually used. I'm not trying to say that level of debt isn't bad, but the household debt for example will include mortgages, which gives you a taste of why it is a bit more nuanced than that graph or article is stating.
and I took it to mean private was included but (a) I don't understand what that really means when we're talking about this and (b) the Anti-UK article bulletboy posted has this bit in:
"the UK debt, when one adds to its more tenable sovereign debt tranche all the other debt carried on UK books (and thus making the transfer of private debt to the public balance sheet impossible)"
What the hell is he saying with the bit in brackets? It's clearly some sort of caveat I don't begin to make sense of.
and the bracketed section to mean that the level of both private and public indebtedness is so high that a bailout by the government in the event of serious financial stress.
That how I've read it anyway, I'd be happy to hear any other interpretation.
It's not just corporate debt financing, surely?
banks, etc. And that it's so impossibly large for the UK because of the high number of them hanging around the City compared to us being a nation that doesn't produce anything.
Presumably the US has a far, far larger financial debt but is lucky enough to have a GDP that makes it look smaller on this graph?
whereas green is financial sector debt. Makes sense, as our economy has a higher percentage from finance than the others on the graph, and that the whole business is basically borrowing and lending. As I've stated it is pretty useless without more data, what does the other side of the balance sheet look like?
so for example, pension liabilities, borrowed money, finance leases, etc etc. Anything that you're going to have to pay in the future. Again, this is just what I'd expect it to be, from the usual way of doing things, if this graph was originally intended for some other purpose, then it my include/exclude other things.
as JustJay points out below.
mucking about again
Disregard financial sector debt - it's only so high because so much of the global industry clears through the UK.
So we're still left with 450% which is quite high.
But the thing that isn't taken into account is that most of our debt is in our own currency, so it's not so prone to external risk, and our debt repayment average is long, so we're not having to renegotiate often.
High debt isn't an issue so long as you can continue to pay, the cost of repayment doesn't hinder growth. As it's turning out that we're some kind of safe haven for investors - Anyone lending has the knowledge that in the event of struggling to pay, we can literally conjure up more cash out of thin air and hand it over. So we continue to be able to borrow at manageable rates while having control over any internal inflationary risk (unlike the Eurozone).
So yeah, "ooh the UK's bar's big!" - doesn't mean a lot, really.
Peston's comments on the level of debt from last month are fairly OK : http://www.bbc.co.uk/news/business-15820601
You should put it as a comment on the story and see what the reaction is.