Topic: Global Wave of Debt Is Largest, Fastest in 50 Years - page 3. (Read 564 times)

Hey didn't that work for the tv show Mr. Robot?   

If debt is wiped out across the board. It could also wipe out retirement plans, food stamps, welfare, pensions, health insurance and other state funded programs people rely upon for survival.

There was a reason behind a sharp increase in fatalities after the USSR defaulted on its deficit. Russians lost their state funded pension plans and had no alternatives.

There appears to be confusion as to what happens when a state cannot pay its debt. I think the best analogy is a bank or large corporation going bankrupt. Whatever side effects or outcome, they may not be pleasant.

I foresee one viable option, money is debt and debt is money. the current fiat system has to go. No more paper value, All bank accounts to zero. no more Mortgage, Loans or other forms of debts, nothing to payback, but then what's your 5 bucks gonna get you? For the only way to eliminate the self imploding debt, is to kill the monetary system. A group of cryptographers named Satoshi Nakamoto, created a emergency exit, BITCOIN. "Let us be rid of the debt, and by the same token, instate a one world currency unit. Then we shall control not only the economy of one country, but the world."

I foresee one viable option, money is debt and debt is money. the current fiat system has to go. No more paper value, All bank accounts to zero. no more Mortgage, Loans or other forms of debts, nothing to payback, but then what's your 5 bucks gonna get you? For the only way to eliminate the self imploding debt, is to kill the monetary system.

Plus, I believe that in talking about profits, letting a market crash happen while they stand together with gold would bring them more profit and honestly, it's already been quite some time since the debt has been announced to be over the top and yet, the top brass has done nothing to appease the problem.

China’s had another record year of corporate bond defaults. That’s not a crisis. It’s a plan.

A decade ago, defaults almost never happened, but that wasn’t because companies in China were always healthy. It was a reflection of the tightly controlled financial system, where companies were often linked to the government and bonds were largely bought by state-owned lenders. Authorities have often stepped in to ensure that financially troubled enterprises didn’t crash into default, out of concern over social unrest in the event of job losses or missed payroll payments.

This system imposed little discipline on borrowers. Now global investors are coming into China’s bond market. Though many companies are still state-backed, policymakers are getting more comfortable with defaults. Without them, bond buyers would have little incentive to make a careful assessment of a company’s creditworthiness.

You are too funny. So far, there have been many crises so far, and we have all taken steps regarding the supply of fiat money.

all economists know Bitcoin is a scam. No one manages it

Don't be too naive to think that bitcoin can help the whole world prosper! It is the tool to kill those who think like you.

Somehow I get a feeling neither central banks nor governments of the world, will make a legitimate move to address these issues. As global debt accumulates and negative attributes associated with inflationary money exert more destructive influences upon job markets, economies and living standards. Is there a chance we'll witness an exodus from inflationary models towards more deflationary paradigms such as gold standards or bitcoin?

 

WASHINGTON, December 19, 2019—Debt in emerging and developing economies (EMDEs) climbed to a record US$55 trillion in 2018, marking an eight-year surge that has been the largest, fastest, and most broad-based in nearly five decades, according to a new World Bank Group study that urges policymakers to act promptly to strengthen their economic policies and make them less vulnerable to financial shocks.

The analysis is contained in Global Waves of Debt, a comprehensive study of the four major episodes of debt accumulation that have occurred in more than 100 countries since 1970. It found that the debt-to-GDP ratio of developing countries has climbed 54 percentage points to 168 percent since the debt buildup began in 2010. On average, that ratio has risen by about seven percentage points a year—nearly three times as fast it did during the Latin America debt crisis of the 1970s. The increase, moreover, has been exceptionally broad-based—involving government as well as private debt, and observable in virtually all regions across the world.

“The size, speed, and breadth of the latest debt wave should concern us all,” said World Bank Group President David Malpass. “It underscores why debt management and transparency need to be top priorities for policymakers—so they can increase growth and investment and ensure that the debt they take on contributes to better development outcomes for the people.”

According to the report, the prevalence of historically low global interest rates mitigates the risk of a crisis for now. But the record of the past 50 years highlights the dangers: Since 1970, about half of the 521 national episodes of rapid debt growth in developing countries have been accompanied by financial crises that significantly weakened per-capita income and investment.

“History shows that large debt surges often coincide with financial crises in developing countries, at great cost to the population,” said Ceyla Pazarbasioglu, the World Bank Group’s Vice President for Equitable Growth, Finance, and Institutions. “Policymakers should act promptly to enhance debt sustainability and reduce exposure to economic shocks.”

The analysis found that this latest wave is different from the previous three in several ways—it involves a simultaneous buildup in both public and private debt; it involves new types of creditors; and it is not limited to one or two regions. Some of the increase in debt has been driven by China, whose debt-to-GDP ratio has risen 72 points to 255 percent since 2010. But debt is substantially higher in developing countries even if China is excluded from the analysis—among EMDEs, it is twice the nominal level reached in 2007.

Those characteristics pose challenges that policymakers haven’t had to tackle before. For example, nonresident investors today account for 50 percent of the government debt of EMDEs, considerably more than in 2010. For low-income countries, much of this debt has been on non-concessional terms, and outside the debt-resolution framework of the Paris Club.

Under the circumstances, policymakers should develop mechanisms to facilitate debt resolution when it becomes necessary, according to the report. Greater debt transparency would also help.

https://www.worldbank.org/en/news/press-release/2019/12/19/debt-surge-in-emerging-and-developing-economies-is-largest-fastest-in-50-years