The IMF came out with a new report on Oct. 5 showing that the expansion of global debt has now reached 225% of the world’s combined GDP. In fact, the $152 trillion that encompasses general government obligations, household debt, and debt of non-financial firms, means that it would take confiscation of all the wealth generated throughout the world by individuals and businesses over the next 2.25 years just to payoff this behemoth obligation.
But perhaps what is most ironic about this staggering number is that it is less than 20% of the total amount of debt obligations held solely by the world’s financial institutions in derivatives, debt instruments such as bonds, and other credit obligations.
In addition to reporting on the dangers facing global banks as a result of declining profits in the current low rate environment, today the IMF also released its latest Fiscal Monitor report which sounded a loud alarm when it revealed something disturbing: at 225 percent of world GDP, the global debt of the nonfinancial sector, comprising the general government, households, and nonfinancial firms, is currently at an all-time high of $152 trillion. - Zerohedge
The U.S. alone has over $19.5 trillion in reported debt, with by some estimates another $240 trillion owed in ‘unfunded liabilities’. And since America’s annual GDP is only around $17.95 trillion, in economic terms the nation is already insolvent and standing at nearly 108.6% debt to GDP.
Since the majority of the world’s central banks have little or no interest in ever seeing this debt paid off, their policies have been focused more on creating credit and debt as a means of trying to stimulate economic growth. And having kept the cost of borrowing money at both zero and negative interest rates for close to a decade, the next report for 2017 that the IMF publishes will not only show a much greater level of debt, but an accelerating one that will soon be beyond anyone’s ability to manage or retract it.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.