The biggest financial story of 2019 ignored by the mainstream media -- Current global debt levels are not sustainable

The Institute of 

International Finance 

                ( IIF ) 

says global debt 

is expected to pass 

       $255 trillion, 

by the end of this year.

And debt accumulation 

is not slowing down.

Official global debt 

has skyrocketed 

from about 
$80 trillion in 1999, 
to $255 trillion,

which is roughly 

330% of global GDP.

Debt growth has 

been outpacing 

economic growth, 

by a large margin,

for a long time.

The World Bank 

looked at the major 

debt increases 

that have occurred 

in more than 

100 countries

since 1970.

The biggest 

debt "waves"

in history

include:

(1)  Latin American 

        debt crisis 

        of the 1980s, 

(2)  Asian 

       financial crisis 

       of the late 1990s

(3)  Global financial crisis 

        from 2007 to 2009.

The World Bank 

says we’re in the 

fourth big debt wave, 

and their prognosis 

is not good.

World Bank 

President 

David Malpass, 

said that 

if a crisis 

were to hit: 

“Emerging 

and developing 

economies 

are already 

more vulnerable 

on a 

variety of fronts, 

than they were 

ahead of the 

last crisis.”

They called 

the failure to 

properly manage 

the global debt 

“complacency”:

“The increase 

in debt globally 

has already been 

larger, faster, and 

more broad-based 

since the Great 

Financial Crisis,

than in the 

previous 

three waves. 

This should be seen 

as a leading indicator 

for the possibility of 

financial crises ahead, 

and shake up 

the complacency

that is evident 

in macroeconomic

policymaking today, 

with regard to 

increasing levels

of both public 

and private debt.”

The low 

interest rates 

encourage 

unsustainable 

debt levels.

With so much debt,

even modest rate 

increases will force 

new borrowing 

just to cover 

interest payments.

One example:

The shale oil “miracle” 

used debt to provide 

the illusion that the 

nation could be

self sufficient in oil.

Production is nearing 

13 million barrels-a-day.

But it appears 

to be a Ponzi scheme

business model.

The producers 

can’t make money, 

and they’ve 

spent ten years 

fooling investors. 

The result will be 

less investment ,

in a business that 

requires constant 

re-investment. 

When the cost 

of energy exceeds 

the value of the

net energy you get, 

then debts of every kind 

can no longer be repaid.

The bankruptcies 

have only just begun.

Debt is sustainable 

only when used 

for projects with 

positive returns 

       causing

the economy to grow 

faster than the debt.

That has not 

been happening.

Meaning that 

global debt growing

as a percentage of GDP,

is not sustainable.