As noted in previous posts growth for the past 40 years has relied on the private sector taking on debt in ever larger amount. This reached record levels before the global financial crisis, and attempts to pay down this debt are responsible for the protracted recession. That is why central banks are desperately trying to convince the private sector to start borrowing again.
While this has not succeeded, there is one group that have increased their borrowing rapidly since the global financial crisis, and that is students. In both the USA and the UK student debt is surging fast. In the USA and the UK this was a result of a rapid increase in University fees and government underwriting of loans to pay for them.
Students are building up debts that they can never repay. Like all bubbles this will end in tears. Already there are signs that this new credit bubble is about to burst in the USA.
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