Skip to comments.Global Debt Soars to $169 Trillion: Will We Ever Learn?
Posted on 09/12/2018 9:05:07 AM PDT by SeekAndFind
Ten years have passed since the 2008 subprime mortgage crisis, the worst financial panic since the Great Depression. Now it seems that some of the lessons learned back then are being forgotten. Growing debt burdens in emerging markets are igniting new fears of a crisis that could shake economies everywhere.
This time, the debt is not mortgages or deficit spending. The new crisis involves corporate debt and bonds.
What is setting off alarms is the recent collapse of the Turkish lira, which has lost more than forty percent of its value. Turkish banks and companies borrowed heavily over the past few years to finance infrastructure projects and even a mammoth cruise ship terminal. The lira's collapse makes it hard to repay loans or bonds made in dollars and euros.
Turkey is not alone in its dollar- and euro-delineated debt burden. Similar loans and corporate bond issues can be found in Brazil, South Africa, Argentina, Russia, and other nations. They have taken advantage of cheap money to bolster their national economies and build infrastructure. Investors have likewise shifted their money to these markets, ignoring risks and creating a massive bubble.
As a result of such policies, the McKinsey Global Institute reports that total world debt load is an incredible $169 trillion as compared to $97 trillion in 2007. This burden amounts to nearly two and a half times the size of the total global economy.
(Excerpt) Read more at americanthinker.com ...
All that means is that it’s gotten so big it can NEVER be repaid.
Everyone will realize this, shrug, and life will go on.
The End Game
Banks will own the productive capacity of the World
Should we welcome our Banker Overlords?
1) Perhaps I miss the distinction, but a bond is a debt, so "corporate debt and bonds" seems redundant.
2) No one should be Too Big to Fail. If a corp can't pay off its debt, let it go under. We'll survive.
3) Government attempts to "fix" this sort of thing can only make it worse.
yep, but that is when wars begin
Seems we already have.
I'm hoping that artificially intelligent pleasure bots seize power first.
Ours is ONLY $20 trillion. We’re doing just fine aren’t we?
And we are not yet to WWII levels, and we did eventually recover from that.
In my family, we had a saying: “I’d rather owe it to you than cheat you out of it.”
Who cares ?
“Global Debt Soars to $169 Trillion: Will We Ever Learn?”
Yes.....yes we will.
Fortunately, the world is in net debt to ... it’s self. No problem.
You are being simplistic and missing something huge. We are essentially AT that WWII level of debt right now. But back then we were buying battleships, P-51 Mustangs, and other war stuff. When the war ended, that came to a screeching halt and the economy soon switched over to flooding the 1950s consumer with products.
Today it is a massive socialist welfare state and literal perpetual war driving the spending. There will never be a time we do not spend at wartime levels for the military. There will be no end to the welfare state, and we cannot convince the government to stop importing millions of leeches into the country who will never work.
And the postwar consumer boom that fuels the economy and jobs won’t happen, because now the entire government and business sector wants those jobs somewhere overseas.
SO we do have WWII levels of debt, and the two things that let us work our way out of that, and end to the war, and a hungry consumer market fueled by a domestic means of production will never happen.
Oh, and for extra fun, think about one other past WWII reality. WE were the only modern nation on earth that was intact and not a smoking ruin. We had a global market that had to turn to us.
We will not be working our way out of this one. There will be a reset and our currency will be devalued. That, or a cataclysmic war. History provides no other example.
Yes, we have a lot of work to do. But adopting a fatalistic attitude and announcing we can't change the course of government is loser talk.
We already have made some changes.
There is plenty of hope. And we still have 6.5 more Trump years left.
I disagree, Russia and China both know if Trump is successful America will dominate into the future, now is their best hope
I have a question here for those FReepers with an understanding of economics: If I write my friend an I.O.U. for $1 trillion (say, in exchange for his promising to mow my lawn for the rest of my life), does global debt then rise to $170 trillion?
Second question: If I am a publicly-traded company and issue 1 million shares for $1 a share - and then some shareholder offers one of his shares for sale, and someone offers to buy that single share for $1 million, does my company then have a capitalization (if only for a brief time) of $1 trillion?
It's a different flavor of debt - corporate debt is namely debt owed to a bank or consortium, as opposed to a bond, which is debt owed to an individual bond-holder (and which is traded on the open market).
“It’s a different flavor of debt - corporate debt is namely debt owed to a bank or consortium, as opposed to a bond, which is debt owed to an individual bond-holder (and which is traded on the open market).”
Is this also different than corporate paper, which I understand to be intercompany or interbank loans made and settled daily for day-to-day operations.
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