Global Debt Hits $246 Trillion, 320% Of GDP, As Developing Debt Hits All Time HIgh
ZeroHedge, July 15, 2019 – Excerpts:
According to the latest IIF Global Debt Monitor released today, debt around the globe hit $246 trillion in Q1 2019, rising by $3 trillion in the quarter, and outpacing the rate of growth of the global economy as total debt/GDP rose to 320%
NEW Global Debt Monitor: Global debt hit $246T in Q1 2019, nearly 320% of GDP.
Debt by sector, Q1 2019 (as % of GDP):
🔹Households: 59.8%
🔹Non-financial corporates: 91.4%
🔹Gov’t: 87.2%
🔹Financial corporates: 80.8% pic.twitter.com/4Qu0ekvpZw — IIF (@IIF) July 15, 2019
[snip]
The IIF pointed out the obvious, namely that lower borrowing costs thanks to central banks’ monetary easing had encouraged countries to take on new debt. Amusingly, by doing so, this makes rising rates even more impossible as the world’s can barely support 100% debt of GDP, let alone 3x that.
[According to Sonja Gibbs the IIF’s managing director for global policy initiatives] “It’s almost Pavlovian. Rates go down and borrowing goes up. Once they are built up, debts are hard to pay down without diverting funds from other goals, whether that’s productive investment by companies or government spending.”
And that, in a nutshell, is why the world is doomed to a central-bank created boom-bust cycle, as once there is just too much debt, there will either by hyperinflation or a wave of global sovereign and corporate defaults.
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