Finance Minister Tharman says Global Economy is BAD

http://www.youtube.com/watch?v=jA5MIBazp1c

Key points:

- Problems of Household debt

- Problems of Govt debt

• Europe
• US & Japan over-borrowed before crisis. Spent a lot more during crisis. Debt shot thru the roof. Major risk of credit downgrade.

- Problems of Bank debt

• 1/3 of european banks are short of capital in significant amounts
• Significant proportion of global banks need to renew their debts of $3.5T over the next 2 years

- Inflation all over the world. Commodity, oil prices (middle east unrest).

- China becoming very competitive, not just in the low cost arena, but also high value added arena. China wages rises up rapidly, and productivity, skills, knowledge rising up even faster. India, brazil and eastern european countries also catching up. This increases the risk of stagnation in developed economies