Global Debt Is MORE THAN TWICE AS BIG As Entire World Economy

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Global Debt Is Almost 3 Times As Big As the World Economy… What Does It Mean?

from Washington’s 

The Guardian reports that global debt has grown by $57 trillion dollars – to $199 trillion dollars – since the 2008 financial crisis.

How much is that?  It’s a big number … but what does it actually mean?

The Guardian notes that global debt is now more than twice the size of the entire global economy:

Total debt as a share of GDP stood at 286% in the second quarter of 2014 compared with 269% in the fourth quarter of 2007.

(That’s more than 2.8 times the size of the world economy).

And it will only keep getting worse:

Government debt-to-GDP ratios will to continue to rise over the next five years in a number of countries including Japan, the US and most European countries ….

While the mainstream press talks about “deleveraging”, the fact is that many households are going deeper into debt:

Household debt is “reaching new peaks”. Only in Ireland, Spain, the UK and the US have households deleveraged. According to the study, not only have household debt-to-income ratios continued to rise, they now actually exceed the peak levels in the crisis countries before 2008 in some cases, including advanced economies such Australia, Canada and Denmark.

Why Should We Care?

It has been known for a very long time that debt grows exponentially, while economies only grow in an s-curve.  As such, debt will always overtake prosperity unless measures are taken to reduce it.

In 2008, the most prestigious financial agency in the world – the Bank for International Settlements (BIS), often described as the “central bank for central banks” – said that failing to force companies to write off bad debts “will only make things worse”.

Read More @ Washington’s

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