Photo: McKinsey Global Institute
The U.S. has made significant strides in reducing its debts and may actually return to some semblance of normal by the middle of next year.Europe and Japan, meanwhile, are screwed.
Those are the two key conclusions from an in-depth analysis of global debt levels by the McKinsey Global Institute, a research arm of the consulting firm McKinsey & Co.
In preparing its report, McKinsey took a close look at the “deleveraging” experiences of Sweden and Finland, both of which suffered financial crises in the early 1990s, and compared them to the experience of the U.S., Europe, and Japan in recent years.
Contrary to the howls of doom-and-gloomers who think the U.S. dollar is about to collapse in insolvency, McKinsey’s analysts actually conclude that the U.S is on the road to recovery.
Europe, on the other hand, has not taken the necessary steps to fix its problems, and will take much longer to work its way out from under the debt overhang.
McKinsey has posted its whole report for free online. You can download it here.
In the meantime…