America heading towards an economic armageddon

… so says Stephen Roach, the chief economist at investment banking giant Morgan Stanley, according to this article. The statistics are staggering:

To finance its current account deficit with the rest of the world, he said, America has to import $2.6 billion in cash. Every working day.

That is an amazing 80 percent of the entire world’s net savings. Sustainable? Hardly.

Meanwhile, he notes that household debt is at record levels. Twenty years ago the total debt of U.S. households was equal to half the size of the economy. Today the figure is 85 percent.

Nearly half of new mortgage borrowing is at flexible interest rates, leaving borrowers much more vulnerable to rate hikes.

Americans are already spending a record share of disposable income paying their interest bills. And interest rates haven’t even risen much yet.

(via Boing Boing)

In the US of A, public asks for permission from corporates Nice 404 error message :)