Total global debt has peaked to 326% of global GDP, adding an additional $12 trillion of debt in the last three quarters of 2024, according to the Institute of International Finance. This figure surpasses what we saw amid the pandemic and is expected to continually rise and governments continue to borrow with no intention of repayment.
The Big Bang of the sovereign debt crisis began in 2015.75, as indicated by the computers, around the introduction of negative rates and Quotative Easing, which shifted the risk from the free market to the central banks. The 2015.75 date was also 26 years from the first break in Marxism in 1989. The bottom of the ECM from 2015.75 to 2020.05 was also 31.4 years from the start of the fall of communism that culminated in the final stages of the collapse of socialism. I repeatedly warned that our models indicated the banks would become trapped by these policies and now we have a completely unsustainable situation.
If interest rates rise, their portfolios crash in value (price). Such an outcome would raise the question of will the private sector return to the government bond markets when they see there is a rising risk factor? Our model showed that this would not be the case. In other words, the Sovereign Debt Crisis has taken place and to prevent the PRICE crash, the central banks became the buyer to hold interest rates down and bond prices up. We have seen governments and institutions offload bonds and government debt since the Big Bang.
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. These nations cannot afford to simply not repay and multilateral development banks have turned into lenders of last resort.
ALL government debt is in serious trouble because they just never fund a damn thing. The 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.
We have seen larger economies begin the snowball effect of borrowing after World War II and the repercussions are now arising. Now we have a serious crisis that has shifted from the free trading bond markets exclusively to the central banks. This is part of the crisis unfolding in the repo market. 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. The majority of nations are simply too far gone in debt to ever properly repay. Who would buy if there is no guaranteed return?
Total global government debt is now $98,000,000,000,000 ($98 trillion) and is forecast to reach $130 trillion by 2028, which is also when the computer has predicted that the world will feel the aftershocks of a global recession.
