18 June 2010

Gotterdammerung?

There was a great article this week in the UK Telegraph which confirmed what we have been saying for a long time. Whilst people are rightly concerned about the indebtedness of the UK and other European countries such as Greece, Spain and Ireland it is Germany that they should be really worried about. As the Telegraph has confirmed it is the Germans that have the most household debt as can be seen from the graph below.

Now, this is a tad worrying considering it is the country which is meant to be bailing out the rest of Europe. I am fully aware that Germany has a larger population than any other country in the EU but the facts are there nevertheless. The next graph, again courtesy of the Telegraph, shows what happens when you match household debt with disposable income. Okay, the figures concerning Spain and the UK are frightening but the Germans are ahead of the Greeks and just behind the Lithuanians who are not actually promising to bail out their fellow Europeans.

Whilst it is very true that the Brits and Spanish have massive government debts as well as family ones it should be remembered where they get their money from - i.e. the people. Interesting times as the Chinese say.