Deleveraging: Now the hard part

Every research into finding the causes of recent financial crisis leads to one point that debt is the cause, yet there is blindness and deafness. What could be said about this phenomenon other than that 


"As to those who reject Faith, it is the same to them whether thou warn them or do not warn them; they will not believe."
"Allah hath set a seal on their hearts and on their hearing, and on their eyes is a veil; great is the penalty they (incur)."
(Aya 6 & 7 of Sura Al-Baqara)


Here is an excerpt from Mackinsey Global Institute research report.


"Even as signals multiply that a global economic recovery is underway, government and business leaders face uncertainty over its durability and how to manage the lengthy process of debt reduction—or deleveraging—that will weigh on growth after the bursting of the great global credit bubble.

New McKinsey research shows that the challenge of reducing total debt levels relative to GDP is a global problem that is only just getting started. Leverage is still very high in some sectors of several countries, including the United States. History also shows that deleveraging episodes are painful—on average lasting six to seven years—and exert a significant drag on GDP growth in the early stages." 

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