Tuesday, July 14, 2009

Well what about private foreign debt then?

It's climbed enormously since the 1970s, taking up where government debt left off:

A lot - but not all - of it has been borrowed for worthwhile purposes.

Recently it's been leveling off:

This is the  Parliamentary Library paper that explains what's been happening.

A commenter asked whether I thought the explosion in private foreign debt mattered much.

I replied that I didn't think it mattered much in and of itself.

But I noted that markets may (suddenly) take a (quite possibly irrational) set against it, which would make my own views beside the point.

I wrote about the danger here.