The beautiful deleveraging goes ugly

From John Tepper comes this sobering chart of debt in the US post-GFC, just as it hits new highs in the stock market and elects an Administration and Congress hell bent on soaring government debt even higher:


Not quite the beautiful deleveraging that Ray Dalio at Bridgewater talked about several years ago as the lessons from the GFC are tossed to the sinbin of history.

Its the same in Europe, from PIMCO:


And of course, the land of “she’ll be right mate, I’ve got equity!”



Luckily, Australia has lots of iron ore to prop that all up.

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  1. Australia is only Bronze Medallist in the household Debt stakes, at 123% behind Denmark 124% and Switzerland at 127%.
    If the Govt takes on less debt then we will surely catch up in a couple years. Pretty sad life to be a debt slave. Especially with jobs being so casual and insecure.

    • Household debt might be falling because the govt is running large deficits which mostly end up in Sydney and melbourne. Again as torchwood says foreign money coming in to buy our assets, in all their forms not just houses, can mean a drop in household debt.
      Noe also it is Australian household debt – how it is distributed geographically might prove intersting
      NB Despite the belief of its citizens, News media, governments, Treasury and RBA Sydney is NOT the whole of Australia

    • Be patient David. Strayan GDP growth is negative now after rising rapidly. This helped ‘hide’ the ‘truth’ and made us look, well sorta lazy. We’re just getting the ‘hang’ of the new trampoline springs–watch our vertical now!. We’re still #1 for courage and fearlessness in the debt ‘volume’ event.

  2. Tepper’s a strange cat. He blocked me on Twitter when I sent him a link to an age article which, quite frankly, made a bit of a liar of him.