UK Debt - some statistics.

[Keela]

Debt statistics.

http://www.creditaction.org.uk/debtstats.htm

Average household debt in the UK is ?8,841 (excluding mortgages) and ?55,567 including mortgages.
Average owed by every UK adult is ?28,600 (including mortgages). This grew by ?220 last month.

This is just a snippet of the stuff on this page. Some graphs on average house prices etc are also interesting.

[Totally_Baffled]

{Devils advocate mode}

28K per adult, including mortgages?

Average income per adult is probably circa 25K , so is this that bad really?

[oilslick]

That's horrendous! Keep in mind

a) there are lots of savers
b) a huge number of people rent so don't have any mortgage
c) a huge number of people live in houses that are paid off (although most of them have probably MEW'ed themselves back into debt by now!)

So if just took the people with a mortgage you might be looking at 4,5, 6 times that amount.

Sadly in about a month most of them will be starting to realise that nobody can get a mortgage any more so the house they thought was worth 300k is actually nearer the 100k it was back in 1998.

[Totally_Baffled]

That's horrendous! Keep in mind

a) there are lots of savers
b) a huge number of people rent so don't have any mortgage
c) a huge number of people live in houses that are paid off (although most of them have probably MEW'ed themselves back into debt by now!)

So if just took the people with a mortgage you might be looking at 4,5, 6 times that amount.

Sadly in about a month most of them will be starting to realise that nobody can get a mortgage any more so the house they thought was worth 300k is actually nearer the 100k it was back in 1998.

{Devils advocate mode off}

Good post in response, and of course you are correct.

At least therefore there is "huge"(to use your own words) amounts of people NOT stuffed by the credit meltdown (the renters, those without mortgages and the savers etc)

A very tiny silver lining....

[oilslick]

My only worry is that there are more people going to be stuffed so there might be more votes in bailing them out.

So being prudent might end up getting nowhere. I recommend an uprising if that happens!

PS - and I didn't use the 'h' word anywhere!

[Totally_Baffled]

My only worry is that there are more people going to be stuffed so there might be more votes in bailing them out.

So being prudent might end up getting nowhere. I recommend an uprising if that happens!

Fair comment! Like yourself and many others on here , I am busting a gut to get debt free!

PS - and I didn't use the 'h' word anywhere!

I was refering to points 2 and 3 in your original post thats all (apologies - being pedantic)

b) a huge number of people rent so don't have any mortgage
c) a huge number of people live in houses that are paid off (although most of them have probably MEW'ed themselves back into debt by now!)

[oilslick]

It's OK, I think I had too much coffee! (or is that a huge amount of coffee? )

[Keepz]

Debt statistics.

http://www.creditaction.org.uk/debtstats.htm

Average household debt in the UK is ?8,841 (excluding mortgages) and ?55,567 including mortgages.
Average owed by every UK adult is ?28,600 (including mortgages). This grew by ?220 last month.

This is just a snippet of the stuff on this page. Some graphs on average house prices etc are also interesting.

Not denying that it's interesting and important, but I'm having trouble understanding the relevance to peak oil. Could we perhaps ask the moderators for a separate forum on national/international finance/economics where this sort of thing, US mortgage meltdown etc could be discussed?

[Totally_Baffled]

Not denying that it's interesting and important, but I'm having trouble understanding the relevance to peak oil.

Peak oil will be arguably the largest economic event in history.

Peak oil = forever higher oil prices = inflation = higher interest rates.

Higher interest rates + record levels of debts of all kinds = economic implosion

Alternatively:

If interest rates are not raised in response to inflation - eventually you get currency devaluation , hyper inflation and a economic implosion as per the first scenario (as everyones buying power is totally destroyed - either via the hyperinflation or via unemployment!)

[oilslick]

Not denying that it's interesting and important, but I'm having trouble understanding the relevance to peak oil. Could we perhaps ask the moderators for a separate forum on national/international finance/economics where this sort of thing, US mortgage meltdown etc could be discussed?

I think it's highly relevant...if this really kicks off to the degree a lot of people think then peak oil will no longer be as important as we'll have no money to spend on anything anyway. All the assumptions that we've made on depletion etc will be out the window.

[cake]

Sadly in about a month most of them will be starting to realise that nobody can get a mortgage any more so the house they thought was worth 300k is actually nearer the 100k it was back in 1998.

Hi oilslick....

why do you say in about a month?

[oilslick]

Hi oilslick....

why do you say in about a month?

Hi - I think it will take a month or so for it to filter through that nobody is lending any more. Cheap credit is gone...for corporate buyouts down to dodgy mortgages...and probably half of mortgages these days fall into the dodgy category.

The central banks might delay things or take some of the pain but they can only go so far.

My view of things is that we'll be back to 3.5 times salary mortgages with deposits...that equals probably a 50% or more fall in house prices.

[Totally_Baffled]

http://news.bbc.co.uk/1/hi/magazine/6954817.stm

The BBC are desperatley trying to jusitfy the debt - i see the term "growing economy" mentioned quite a lot.

The simple rebuttal therefore is, can anything really grow forever????

The article states the money supply quadruples every 30 years, shouldnt he consider how that can continue to happen forever into the future???? What is the end game?

[clv101]

http://news.bbc.co.uk/1/hi/magazine/6954817.stm

The BBC are desperatley trying to jusitfy the debt - i see the term "growing economy" mentioned quite a lot.

The simple rebuttal therefore is, can anything really grow forever????

The article states the money supply quadruples every 30 years, shouldnt he consider how that can continue to happen forever into the future???? What is the end game?

It's one thing to say it can't grow forever, something very different to say that growth stops in 5 years time rather than 50 years time. We have after all been growing (unsustainably) for thousands of years.

[Totally_Baffled]

It's one thing to say it can't grow forever, something very different to say that growth stops in 5 years time rather than 50 years time. We have after all been growing (unsustainably) for thousands of years.

Ah yes, but that is the point - when articles like this are written they do not consider the sustainability of growth.

If the writer of this article first acknowledged that economic growth was not possible "forever", then could comment on our debt in the context of how long it would take to pay off? and therefore the likelyhood of growth for that period of time.

For example - if the level of debt was going to take 30 years to clear (by the time you had reversed the massive deficit spending by governments and consumers alike) , then you could go onto explore how realistic it is to expect the world economy to grow for the next 30 years.

At the current rate of growth - the UK economy would be 2.35 times the size it is now in 30 years time! LOL

It is no good comparing this type of growth to that of thousands of years ago as 3% of a trillion is a lot fecking bigger than 3% of ?1!!

Once you get over the fact that growth isnt possible forever - you cannot avoid exploring the exponential function of growth.

A few simple calculations would show the author that we cannot acheive 2.35 of everything in the UK in 30 years time!

If therefore no growth , record debts = very bad!