The world’s total liabilities continue to grow rapidly as a new report reveals global debt is now over a record $250 trillion. For many investors and market watchers this raises the specter of another potential major economic crisis triggered by a collapse of the global financial system. Despite this, the central bankers who are causing the situation with historically low interest rates remain complacent, with the head of the Fed saying the situation is “pretty sustainable.”
Also Read: Low Interest Rates Are Crushing Young People and Fueling Global Riots
World’s Total Debt Sets New Record
The Institute of International Finance, an association of financial institutions created after the debt crisis of the early 1980s to help the industry with risks management, has recently released a worrying new report. It shows that the world’s total debt surged by $7.5 trillion in the first half 2019, hitting a new record of $250.9 trillion at the end of the period.
The report explains that China and the U.S. accounted for over 60% of the increase. Additionally, emerging market debt also hit a new record of $71.4 trillion, equal to 220% of GDP. And with this rapid pace not cooling off global debt is expected to surpass $255 trillion by the end of this year. “With no sign of a slowdown, we expect the global debt load to exceed $255 trillion in 2019 —largely driven by the U.S. and China,” the researchers warned.
Many investors and market watchers consider the ever mounting debt to be a serious risk for the global economy. Even the International Monetary Fund (IMF) published a report about the systemic risks faced by the global economy in October, highlighting the high level of global debt caused the historically low interest
