The biggest economic threat today is not the interest rate, nor the exchange rates, nor the possible trade war fuelled by Trump: it’s the debt accumulated by countries across the world. This has increased 12% of GDP since the crisis, totalling 225% of global GDP. Starting with China, followed by Europe and ending up with the US, the threat from the current and future debt is terrifying.
world debt rise
The IMF estimates world debt at over $150 billion as can be seen in the graphic below. This represents approximately 250% of global GDP. And it’s easy to see that the bulk of it is private debt. It’s also clear that debt jumped massively when the crisis broke out in 2008 and has continued to grow since then. In 2008, debt was less than 150% of GDP.