Closing the door on the GFC

The private debt deleveraging that caused the GFC appears to be over. But there’s an ominous underlying trend central banks are ignoring.

One of the ironies of the economic crisis that began in late 2007 is that the best acronym for it -- the “GFC” for “global financial crisis” -- was coined in the one country that suffered the least from it, Australia. The year 2014 is the seventh of the “GFC” (the panic began on August 9, 2007, when BNP Paribas shut down three of its subprime-based funds), but at last the majority of economic reports are of sustained if anaemic growth, rather than of bank failures and recession. Australia’s reported growth rate for 2013 of 2.8 per cent follows the UK reporting 1.9 per cent and the US 2.4 per cent; even the EU, where several countries are still mired in outright Depressions, recorded an overall growth rate of 0.1 per cent for 2013.

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