Growing Fears That This Week's Interest Rate Rise Could Trigger A Global Debt Crisis

Ambrose Evans-Pritchard, The Telegraph: US interest rate rise could trigger global debt crisis

Global debt levels are dangerously high and central banks cannot keep the game going indefinitely, warns the high priest of orthodoxy

Debt ratios have reached extreme levels across all major regions of the global economy, leaving the financial system acutely vulnerable to monetary tightening by the US Federal Reserve, the world's top financial watchdog has warned.

The Bank for International Settlements said the wild market ructions of recent weeks and capital outflows from China are warning signs that the massive build-up in credit is coming back to haunt, compounded by worries that policymakers may be struggling to control events.

"We are not seeing isolated tremors, but the release of pressure that has gradually accumulated over the years along major fault lines," said Claudio Borio, the bank's chief economist.

Update: Fears grow over US stock market bubble -- Financial Times

WNU Editor: Government/business/individual budgets are not ready to face rising interest rates. Unfortunately .... with governments now at the limit on what they can do .... I can easily foresee the end of cheap money and higher interest rates .... and sooner rather than later. The consequences of such a rate rise are obvious .... higher taxes, government cutbacks, individual purchasing power declining, a sell-off of homes, and .... a hell of a lot of unemployment.