The Debt Crisis In The UK Is It About To Explode?

By | November 4, 2013

There are many sites on the financial market are warning about the pressure that the UK is facing and how there might be more to the problems than many people are realising.

 Bank of England, London, UK

Is it possible that the economy in the UK might be on the verge of collapse? What is the likelihood that the economy will fall into a more difficult situation than what it already is? Many experts are warning that the markets in the UK are about to hit even bigger problems than what they are experiencing at the moment.

All the services that are run by the government in the UK would face the prospect of become sold off or discontinued. This would enforce the large dispersal of civil servants and the chances of these people being able to find work will be limited. Employment would decrease and the strain on the government would increase as people would seek the support in benefits to help them get by.

How will it affect the lives of the people?

But how will it affect the people that are living in the UK? At the moment the government are trying to save money but the problem is getting worse and not better. How can the ordinary people of Britain are expected to budget and manage their money when the government has not managed this task either. It is not just the UK that is trying to manage with ever increasing costs and trying to balance the books. The world is living in an imaginary world where borrowing money has become a norm and this had had an effect on the world that we are a living in.

How would people’s lives improve when the world in which we have spent the last 15 years of low interest rates will crash and the ordinary person will not be able to afford the debts that they have been able to obtain? There would be even more of a crisis with people being unable to afford life’s essentials and the possibilities of having luxuries would be a thing of the past.

There are thousands of people that are only managing to survive and are being trapped into the payday loan lenders because there is no other alternative. But what will happen to these people if the banks start to fail and the government can’t afford to bail them out this time? How much money will the general population lose?

If the banks start to fail then this will have a knock on effect to the stock market, the prices will crash and people’s investments will be wiped out, sending more people into a life without money with which they had built up there investments. It is those banks that have taken on large debts from some of the countries that are in the throes of financial crisis like Ireland and Greece.

These are just the beginning of what some people are considering to be the beginning of the financial crisis and not the end which many have hoped for. The bonds and the gilts that are provided by the governments seem riskier by the day. If the American government hadn’t agreed with their budget and raised the debt ceiling, they might have been facing the first default in their history in not paying the interest and the payments on some of the bonds that they had issued.

World pressure

For many people around the world they are intense at following the volatile markets of the UK but are they forgetting some of the other debt laden countries that are looking very shaky at the moment with high debt to the ratio of money that the country can hope to generate with the worst country being Japan which holds the biggest debt in the world.

But it seems that governments around the world need to stop borrowing money at the rate that they are because if the interest rate was to rise then the payments that they have borrowed are going to sky rocket out of control. These governments that have enticed voters with the promise of better life and services and to pay for these they borrowed and they have borrowed at some low rates that have meant that they have had low interest payments to make. But what happens when the rates go up what will happen to these governments then?

Is the banking bubble set to burst again and are the banks going to get the rescue package similar to what many have had before? If banking institutes fail what is the best place to have your money? Is it going to be safer in the smaller institutions like credit unions? These can only be speculations as many people just don’t know what will happen if the banks around the world start to collapse. Would large amounts of money be stored in less secure places or would the value of money in general fall?

What should you be watching:

  • Banking
  • stock markets
  • pressures outside the markets that can have an effect on the markets

What to do

It is not a message to scare people and to tell them to withdraw from the stocks and shares in some of the countries that might be part of a ticking time bomb but to act with caution and to get advice from the professionals. Make sure that you are paying for the right advice, one that has looked at your portfolio and have listened to your concerns as to what might be the best course of action.

There are some people that follow the advice of to leave your money and you should expect for the ups and downs in any investments but there is a time when you need to consider if losing the capital that are invested in some of the areas that have the potential to burst is the right thing for you to do.

There are many reasons and the needs to be considered on an individual basis and it is going to have to be your own decision as to what you do with your investment portfolio, it might be the time to perform a view to make sure you are heading in the right direction.

What are your thoughts with the potential crisis that is seemingly being hinted at in the financial news?

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