World debt worse than pre GFC
At a time when the recovery rhetoric is in overdrive from the US it important to reflect on where we are now versus just pre GFC. The table below debunks the myth we have reduced our burdensome debt. Not only has total debt to GDP risen by 35%, the main contributors are the economies showing signs of real problems such as the Eurozone, Japan and China. The front page of today’s Financial Review carries a story from one of Australia’s top investment advisors. He states “It is one of the oddest periods in financial history” and that the global economy is heading for “back-breaking hardship” if inflation rises sharply. History shows that the type of money printing undertaken by the US, Japan, China, UK and (few doubt) soon to be Eurozone leads to exactly that. Whilst he says shares etc may have a bit to go, gold and silver are the perfect hedge for when the ‘back breaks’.