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Der Standard - Austria | Friday, September 5, 2014

Global economy a huge house of cards

The ECB is helping to turn the global economy into a house of cards that will sooner or later collapse, the left-liberal daily De Standard warns: "The low interest rates have induced households to amass growing debts. In the past six years the ratio of household debt to disposable income rose globally from 155 to 175 percent. Investors and banks have become increasingly audacious because secure investments don't pay off, and therefore they take more risks. The result: the supply of high-yield corporate bonds has tripled in the past three years, and the proportion of borrowers with low credit ratings has risen dramatically. Added to that is the flight into material assets, above all luxury real estate. The central banks have turned the global economy into an enormous house of cards that will inevitably come crashing down sooner or later. And instead of stepping on the brakes, they're blithely carrying on as before."

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