[Vision2020] The World Is $199 Trillion in Debt, and Growing

[Kenneth Marcy]

The World Is $199 Trillion in Debt, and Growing

By John C. Ogg

The world’s economies may have improved since the financial crisis, but 
now more than ever, the world is drowning in higher and higher debt. A 
new report from the McKinsey Global Institute 
<http://www.mckinsey.com/insights/economic_studies/debt_and_not_much_deleveraging> 
suggests that the world has added a whopping $57 trillion in debt since 
the financial crisis. The firm pointed out that all major economies 
currently have higher levels of borrowing relative to gross domestic 
product (GDP) versus the year 2007, right before the Great Recession and 
financial crisis. The net global debt added since then is now projected 
as a ratio of debt to GDP to be up 17 percentage points.

The new total of global debt, as of the end of the second quarter of 
2014, is a whopping $199 trillion. This massive number compares to $142 
trillion at the end of 2007, and it compares to a mere $87 trillion at 
the end of 2000 (see first image below).

McKinsey’s report highlighted three areas of emerging risk that all of 
this new debt poses. First is the rise of government debt, and second is 
the continued rise in household debt — and housing prices — to new peaks 
in Northern Europe and some Asian countries. Third is the quadrupling of 
China’s debt.

Before you think that this ballooning debt applies only to governments, 
it does not. This also applies to households, corporations and 
financial-related debt.

McKinsey further warns that global household debt is reaching new peaks. 
It was only in nations like the United States, the United Kingdom, 
Ireland and Spain where households have actually deleveraged since the 
financial crisis. The total household debt in other nations, including 
the household debt-to-income ratios, have continued to rise. These 
nations with higher debt were said to include nations such as Australia, 
Canada, Denmark, Sweden, the Netherlands, Malaysia, South Korea and 
Thailand.

The remainder of this story, including graphic charts, is at: 
*http://tinyurl.com/pk538be*


Ken

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