The total debt of states, companies and the population today is estimated at $250 trillion. This amount is almost three times the size of global GDP, and if you divide it among all the men, women and children living on the planet, each would have $ 32,500. By the end of 2019, the volume of world debt could reach $255 trillion, – Bloomberg said.
This amount is by and large the result of conscious efforts by the authorities to maintain global growth through borrowing after the financial crisis. The extremely low interest rates of the post-crisis years made the debt burden bearable for most, while debt levels steadily rose.
The growth rate today is the slowest since the crisis, and regulators are making a lot of efforts to correct the situation.
Among the culprits of the current situation are Central Banks and regulators from ECB President Christine Lagarde to the IMF, who are urging governments to do more, arguing that now is the right time to borrow on projects that will bring economic benefits.
U.S. companies alone account for about 70% of total corporate defaults this year.
US education loans also amount to a very indiscreet sum – $1.5 trillion.
To help the US recover, the Federal Reserve cut interest rates three times this year, bringing the country’s deficit to 5% of GDP. Britain’s main parties, meanwhile, have pledged to return to 70s public spending levels.
As for China, the Chinese government is betting on tax cuts and the nomination of quotas for the sale of bonds.
Global investors, according to economists, are inflating the bubble. About $ 12 trillion of bonds today have negative yields.
The IMF in October said lower yields were encouraging investors such as insurance companies and pension funds to ” invest in riskier and less liquid securities” as they seek higher yields.