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10/11/16

The World is $152 Trillion dollars in Debt.



You want GLOOM & DOOM? You got it. It's hidden in plain sight in the world economy. The Credit Loan Debt creation instruments of Wall Street are a bit out of control. Fiscal policy is even worse. Hyperinflation is the big beast we all need to prepare to defeat. God bless everyone, Stay Cool. T @newTHOR on twitter http://bit.ly/1FL7e16 The Article http://cnb.cx/2e4lmNh Global debt balloons to all-time high of $152 trillion, IMF warns World debt hits all-time high at $152T World debt hits all-time high at $152T Thursday, 6 Oct 2016 | 11:47 AM ET | 00:37 The world is awash with $152 trillion dollars of debt, according to the IMF, an all-time high which sits at more than double the balance at the start of this century. This debt mountain, as of 2015, represents 225 percent of gross domestic product (GDP), up from 200 percent in 2002 and signifies the extent to which increases in borrowing have outpaced economic growth during the period. While the Washington D.C.-based organization emphasized that there is no exact science to knowing how much debt is too much, it has urged governments in certain countries to tackle excessive private debt levels. Role of low rates A prolonged period of low interest rates, initiated when central banks slashed benchmarks as part of the toolkit engaged to counter the effects of the global financial crisis, has seen many corporates take advantage of the favorable terms to issue aggressive levels of debt. Yet the ongoing low interest rate environment has also made it more challenging to erode outstanding debt balances,which can be more easily repaid in a climate of higher inflation. Indeed,the IMF warned that the dynamics of the current situation resembled a negative feedback loop, in which debt deflation is causing the real burden of debt to increase, leading to poorer economic growth and yet further deflation. The IMF acknowledged the decreasing menu of options available to policymakers to trigger effective actions, saying the room for maneuver had shrunk since the beginning of the global financial crisis. It also called on fiscal, monetary and structural solutions to be looked at synergistically to maximize their impact. The organization has sought to pinpoint where it sees the biggest potential problem areas, saying private debt is high not only among advanced economies but also in a few "systemically important" emerging market economies, namely Brazil and China. Pedestrians walk past a sign for the IMF Annual Meeting in Washinton, D.C. on Oct. 4, 2016. Although governments only account for around one-third of the world's debt, the report also showed the swelling of their balance sheets in the years since the financial crisis. The IMF's semi-annual Fiscal Monitor report repeatedly highlighted the crucial role of fiscal actors in creating a stabilizing climate in which growth can flourish and debt balances can be safely unwound, thereby reducing the depth and duration of a potential financial recession triggered by too much borrowing. It pointed to Europe as an example of where an impaired banking system was a hurdle to successful deleveraging. The IMF also singled out China as a country at risk of a disorderly wind-down of current high corporate debt levels. At this week's meeting with the World Bank in Washington,the IMF is expected to repeat its call for states to step up and play a more supportive role as global consensus continues to grow that monetary policy is reaching its limits of effectiveness.


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