No Savings Gluts in the Eurozone

No Savings Gluts in the Eurozone

Daniel Lacalle 06/11/2019 6

World debt at $250 trillion is 3x global GDP – an all-time record. If we include unfunded liabilities and derivatives, total debts and liabilities would amount to over 25x global GDP.

Savings Glut.png

There is no “savings glut” or fiscal space in the eurozone:

  • Households Debt 93.5% of gross income vs average of 88.9% 1999- 2017 (56% of GDP).
  • Corporate debt 96% of GDP, a 56% debt/equity ratio and weakening solvency ratios (Moody’s)
  • Government spending 47% of GDP, debt/GDP 86%

There is no savings glut in Germany either, nor fiscal space. Only a “not as bad as other eurozone” countries’ situation.

  • Households Debt 83.73% of gross income.55% of GDP
  • Total private debt 147.60% of GDP
  • Government spend 44.5% GDP, debt/GDP 60.9%

A version of this article first appeared here

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  • Alicia Fields

    Global debt will keep on increasing

  • Lee Davis

    The Eurozone should do something about this situation

  • James Morgan

    Germany and France must meet up to find drastic solutions

  • Caroline Willans

    I like the video format, it's so refreshing.

  • Dean Egan

    You got me thinking...

  • Charles Hendrix

    Brexit is just a distraction... They are hiding what's wrong.....

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Daniel Lacalle

Global Economy Guru

Daniel Lacalle is one the most influential economists in the world. He is Chief Economist at Tressis SV, Fund Manager at Adriza International Opportunities, Member of the advisory board of the Rafael del Pino foundation, Commissioner of the Community of Madrid in London, President of Instituto Mises Hispano and Professor at IE Business School, London School of Economics, IEB and UNED. Mr. Lacalle has presented and given keynote speeches at the most prestigious forums globally including the Federal Reserve in Houston, the Heritage Foundation in Washington, London School of EconomicsFunds Society Forum in Miami, World Economic ForumForecast Summit in Peru, Mining Show in Dubai, Our Crowd in Jerusalem, Nordea Investor Summit in Oslo, and many others. Mr Lacalle has more than 24 years of experience in the energy and finance sectors, including experience in North Africa, Latin America and the Middle East. He is currently a fund manager overseeing equities, bonds and commodities. He was voted Top 3 Generalist and Number 1 Pan-European Buyside Individual in Oil & Gas in Thomson Reuters’ Extel Survey in 2011, the leading survey among companies and financial institutions. He is also author of the best-selling books: “Life In The Financial Markets” (Wiley, 2014), translated to Portuguese and Spanish ; The Energy World Is Flat” (Wiley, 2014, with Diego Parrilla), translated to Portuguese and Chinese ; “Escape from the Central Bank Trap” (2017, BEP), translated to Spanish. Mr Lacalle also contributes at CNBCWorld Economic ForumEpoch TimesMises InstituteHedgeyeZero HedgeFocus Economics, Seeking Alpha, El EspañolThe Commentator, and The Wall Street Journal. He holds a PhD in Economics, CIIA financial analyst title, with a post graduate degree in IESE and a master’s degree in economic investigation (UCV).

   

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