Saturday Rant…Global Debt 326% of GDP

According to the Institute of International Finance, total global debt has reached 326% of global GDP.

 

Huh?

In Plain English, the GDP to debt ratio is mathematically impossible to service.

 

Translation:  Not sustainable.

 

And today we have a rant from a reader who goes by the handle JustTryMe, about how dangerous this number is to the global economy…including ours.

 

Take it away JTM.

 

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James, in the last three quarters of 2024 global debt increased by over $12 TRILLION.

That’s worse than what we saw during the Covid farce.  And is expected to continually rise…and governments continue to borrow with no intention of repayment.

Emerging markets have reached 245% of GDP in debt, totaling $105 trillion. Poor nations are now spending more on their debt than infrastructure, health care, or education. 

 

ALL government debt is in serious trouble because they can’t control spending.

Their solution is to always borrow and there is no plan to ever pay anything back.

The behind the curtain reasoning is they are burning money for fuel because they are always reducing the value of prior debt that is never indexed to inflation.

This is part of the crisis unfolding in the repo market that you have written about in the past…including the Sovereign Debt Crisis around the world.

 And there does not appear to be any recovery on the horizon. Politicians are undermining the confidence in government, to begin with, and that will influence bond buyers.

The astounding debt crisis has fanned the flames of war as initiating a global conflict is a way, politicians believe, to continue delaying debt payments. Most nations are simply too far gone in debt to ever properly repay.

And who would buy if there is no guaranteed return?

But the real Elephant in the room is how total global government debt is now $98,000,000,000,000 ($98 trillion) and is forecast to reach $130 trillion by 2028.

Outside of FinancialsMatter.com I don’t hear very many people warning about the bond market collapsing, which (as you know) is waaaaaayyy bigger than the stock market.

And thank you, James for pointing out that the defaults have already started and that we should avoid owning government bonds.

If we don’t end up in a massive recession – or a Depression – then I will be amazed.?

What do we do?

Any suggestions?

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Thanks for the rant and staggering numbers about our debt JTM.

Governments will continue down the road to perdition with their debt until they outright default.

That could easily be when things get violent.

And that’s why we have been saying how you should shift a portion of your assets to tangible items in addition to stocks that produce commodities of all sorts.

Read more about them in our February newsletter (HERE).

 

As always, if you – our Dear Readers – have a rant you would like to share then please send it to us.

 

You never know whose life will be affected by it.

 

And if you want to see some NSFW rants then go (HERE).

 

Share this with a friend…especially if they think their money is safe in government bonds.  They will thank YOU later.

 

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Remember:

 

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But we use finance to give you hope.

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