Solomons: Truth Required - Dispelling Myths

2010: Clash of the Titans - Leterrier

When the Bank of England and politicians talk about the possible problems as a result of Greece leaving the Euro, one is only left to wonder if they have looked at their own finances. Here in the real world, the "possible problems" are a reality, with falling stock/share prices, which everyone has some exposure to - be it directly in their own portfolios or as people that live on planet earth and make use of products and services provided by business. Unless you live in a handmade tent and self sufficient, you are being impacted by the Eurozone nonsense that has been rumbling on. The markets are in reaction to indecisiveness. Here are a few facts which may help provide some perspective for a longer term view.

Financial planning is partly about dispelling myths about money. As we know Greece and China are two ancient nations with a great history for mythology, whether its Dragons or Gorgons, Minotaurs or Xiezhi, but their present day financial stories seem to be taking centre stage. However, these two ancient nations would provide a very uneven match for each other, this is no clash of the Titans. Today, Greece has an estimated population of 11.3m (about 20% of the size of the UK population) and GDP of $301,083m (about 14% of the UK's GDP) which has been shrinking each year since 2008. At the same time its public debt has been rising rapidly since 2008 from 99% of GDP to over 150% of GDP. However, whilst the debt is certainly "bad" the percentage figure can be rather misleading when you consider the size of the economy against others.

Compare this to China, where GDP has been growing year on year. The population is a staggering 1,338.3m (over 100 times bigger than Greece) with GDP of $5,926,612m (20 times bigger than Greece) and growing by about 9% a year (almost twice the size of the Greek economy a year). The US has GDP of $14,586,736m about 3 times the size of China (as the world's most developed economy) and has a population of 309.3m (about a quarter of the Chinese population). Here within the British Isles, collectively known as the UK, we have a population of 62.2m and GDP of $2,261,713 equivalent to about 15% of the US and now less than half of the Chinese GDP.

These "facts" are from the World Bank's own data, which anyone can look up online.