Why We Should Worry About The World Economy

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Satyajit Das, The Independent: Why we should all be worried about the global economy

Since 2007, global debt has grown by US$57 trillion and it's had disastrous results

Debt continues to be a major source of instability for the global economy.

Since 2007, global debt has grown by $57trillion, or 17 per cent of GDP. As at mid-2014, global debt was $199trillion, or 286 per cent of the world’s GDP. In comparison, global debt was $142trillion (269 per cent of GDP) in 2007 and $87trillion (246 per cent of GDP) in 2000. Since 2007, no major economies and only five developing economies have reduced the ratio of debt to GDP in the real economy (households, corporations and governments). In contrast, 14 countries have increased their total debt-to-GDP ratios by more than 50 percentage points.

Over 20 countries now have debt-to-GDP ratios above 200 per cent, led by Japan (400 per cent). Since 2007, developing economies have accounted for roughly half of the increase in debt. China’s debt levels have increased rapidly, quadrupling between 2007 and 2014 from $7trillion to $28trillion.

Read more ....

Update #1: These 4 things could rattle the global economy (Bob Bryan, Business Insider)
Update #2: Fragile Currency-War Truce May Fracture (Mark Gilbert, Bloomberg)

WNU Editor: Regular readers of this blog know that the issue of government debt always burns me. To put it bluntly, I live in Canada .... Federal and Provincial total debt is now at $1.2 trillion (2013 numbers) .... sighhh .... that is literally tens of billions of dollars being used to service a debt that should instead be going to social programs, infrastructure programs, and tax relief. And while I do understand the importance of debt .... I also understand the importance of positioning oneself to pay it off. Unfortunately .... this thinking is a minority position in most countries. On a side note .... if interest rates start to climb .... in Canada that tens of billions will become $100 billion and up, and being one who lived in Russia when something like this happened .... trust me on this one .... you do not want to experience that.