Washington (AFP) - A wave of debt in emerging and developing nations has grown faster and larger than in any period of the last five decades and could end with another crisis, the World Bank warned Thursday.
And if the wave breaks, it could be more damaging since it would engulf private companies in addition to governments, at a time when economic growth is sluggish, according to a new report that covers four debt surges from 1970-2018.
"The size, speed and breadth of the latest debt wave should concern us all," World Bank President David Malpass said in a statement.
"Clearly, it's time for course corrections," he added.
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WNU Editor: Most countries are like the U.S.. There is no appreciation on how today's debts will impact spending in the future .... U.S. budget watchdogs howl over deficit-ballooning deals (The Hill).
2 comments:
The US Debt is not that much of an issue; as long as we manage the Debt to GDP ratio which is slowly climbing. However, the smaller developing nations can't manage it because they do not have the manufacturing base thus the debt will crush them. This WILL happen and will create chaos, it's just a matter of time.
What I find interesting in the banking industry today, relative to personal credit and interest, is that banks are prepared to pay you more for what you spend if you use their credit card than they pay you for money on deposit. I am not talking here about big money folk but the little guy.
Use your debit card, or, withdraw and use cash but maintain $1,000 average balance in a bank account and they will pay you about 2% per year or $20 which is taxable.
Keep that $1,000 in an applicable credit card account that pays you for spending via the credit card, and you will avoid paying interest, because of the credit balance in the account, and the bank will pay you, based on an average of 1.5% per money spent of about $180 PA which is not taxable.
For the higher spenders at say $5,000 per month that works out to be $900 tax free.
Again for the little guy who likely carries a balance of a couple/few thousand dollars putting that money into the credit card would increase that financial benefit to around $360 PA again not taxable.
What is interesting about such programs is that the banks have decided to share some of that merchant discount revenue with their customers, a seemingly very unselfish action on the part of the banks.
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