Great chart for the MMT people to consider. Took 235 years for USA to get to $10T in debt, then just 10 yrs to get to $23T. In that 10 years we saw the weakest recovery since WWII. 🤔 If gov't wastes money, this is what you get. Wealth transfers to Top 20%, debt piling up on 80% pic.twitter.com/BmM8UVppRy
— M/I_Investments (@MI_Investments) December 19, 2019
Only took the greatest asset bubble of all time, perpetual $15-20T global QE, 0% rates, US nat'l debt $10T–>$23T, Chin debt $7T–>$40T and structural problems being papered over in new debt pic.twitter.com/GgLCoHaVT1
— M/I_Investments (@MI_Investments) December 19, 2019
Running hot.
10-yr yield vs. Taylor rule rate now at its most extreme in 44 years.
Inflation became a problem during all times this spread went negative.
Never mind the fact that the Fed is also on pace for printing $830B in 6 months!
Long-term yields are clearly misaligned. pic.twitter.com/ySVFnbPYNE
— Otavio (Tavi) Costa (@TaviCosta) December 19, 2019
Rising Debt for Financial Risk Taking Leaves Major Economies Vulnerable
- In a research blog published Tuesday, the IMF highlighted that the use of private debt to fund dividend payouts, share buybacks, or mergers and acquisitions could “amplify shocks” if companies default, or attempt to sharply reduce debt by cutting investment or workforces.
- The new update of the IMF’s Global Debt Database placed total global public and private debt at $188 trillion at the end of 2018, with the global average debt-to-GDP ratio edging up to 226%.
- In a third of advanced economies, the public debt ratio is 30 percentage points higher than its pre-crisis level, while the average public debt ratio in emerging markets is now at levels comparable to the crises of the mid-1980s and 1990s.
The increasing trend of using corporate debt for speculative financial gambles could make the global economy more vulnerable in the next downturn, the International Monetary Fund (IMF) has warned.
The corporate debt ratio in advanced economies has steadily increased since 2010, and now sits at the same level as the previous peak in 2008. Though some large economies such as Spain and the U.K. have significantly reduced debt levels, the U.S. has seen corporate debt grow consistently since 2011 to hit a record high at the end of 2018.
In a research blog published Tuesday, the IMF highlighted that the use of private debt to fund dividend payouts, share buybacks, or mergers and acquisitions could “amplify shocks” if companies default, or attempt to sharply reduce debt by cutting investment or workforces.
“Unlike before the global financial crisis, risks are not solely concentrated in the private sector but also in the public sector, partly reflecting the unresolved legacy of the global financial crisis,” the report from IMF Fiscal Affairs Department Deputy Division Chief Marialuz Moreno Badia and Senior Economist Paolo Dudine said.
The Global Debt Ticking Time Bomb: The Reason To Own Gold & Silver
As Global Debt reached a new record high of $250 trillion this year, gold and silver came briefly back on the radar for investors.