Froth paid for with debt

We can't return to the kind of growth we saw in the years before 2008 because that growth never existed in the first place, says Merryn Somerset Webb.

In this week's interview with Bernard Connolly, we talk a good deal about the horrors of "internal devaluation". This is a euphemism for pushing down wages inside a country until its products are competitively priced enough to sell abroad in quantities sufficient to eliminate a trade deficit.

A euphemism is required because the consequences of internal devaluation are nasty. Falling wages mean falling domestic demand, and by extension high unemployment. They also mean rising relative levels of debt (your wages fall but the interest due on your mortgage does not) and an inevitable rise in bankruptcies and foreclosures. It is nasty stuff.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.