From uncle BEN's Before the Committee on the Budget, U.S. House of Representatives, Washington, D.C. June 3, 2009 : As a consequence of this elevated level of borrowing, the ratio of federal debt held by the public to nominal GDP is likely to move up from about 40 percent before the onset of the financial crisis to about 70 percent in 2011. These developments would leave the debt-to-GDP ratio at its highest level since the early 1950s, the years following the massive debt buildup during World War II. http://www.federalreserve.gov/newsevents/testimony/bernanke20090603a.htm Who in his right mind believes that US debt / nominal GDP ratio is between 40-70 % as Bernanke indicates ? When will Moodys, S&P, Fitch downgrade US rating ???
Come on, asus... There are more interesting candidates well ahead of the US of A in the queue. Japan, UK, Sweden, maybe... Moreover, I'd expect that the ratings agencies have been muzzled, esp in terms of rocking the boat and threatening the large sovereigns.
Gov. debt to GDP in Sweden after their 1990/92 bank bailouts and 90s currency crisis: https://www.riksgalden.se/templates/RGK_Templates/TwoColumnPage____2749.aspx
Cool, Sweden rocks... Forget I ever mentioned Sweden. I am sorry I ever cast aspersions the good Kingdom.
I didn't mean this to dispute you listing Sweden, I think it's just an interesting example for debt/GDP ratios following a housing bubble + bust/bank bailout/currency crisis scenario. Home prices in SE roughly tripled between the mid 80s and 1991 before dropping 25-30% (http://www.scb.se/Pages/TableAndChart____74165.aspx ) Obviously there are always differences and things are never perfectly identical, but interesting nonetheless.
Indeed... Very interesting to see debt-to-GDP during and in the aftermath of the Swedish financial crisis and to juxtapose this with the current situation in the Western economies. BTW, I only listed Sweden in the first place, because of all the talk of their exposure to the Baltics. I really shouldn't have, as I don't know enough about Sweden to confirm the veracity of all the rumors and speculations.
Public Debt as % of GDP https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html 1 Zimbabwe 2 Japan 3 Lebanon 4 Jamaica 5 Singapore 6 Italy 7 Seychelles 8 Greece 9 Sudan 10 Egypt 11 Bhutan 12 Belgium 13 Sri Lanka 14 India 15 Israel 16 Hungary 17 France 18 Ghana 19 Portugal 20 Germany 21 Canada 22 United States 23 Morocco 24 Austria 25 Cote d'Ivoire
Sadly, this is now woefully out of date... Moreover, their methodology is somewhat flawed as they don't include sovereigns' off-balance sheet liabilities.
Rating agencies had a bad conscience regarding AAA ratings of structured products. By questioning UK's AAA rating they wanted to show their "neutrality"...ROFL !