There was probably more logic in Alice in Wonderland’s world than there is in the world’s present astronomical pile of debt. From Tyler Durden at zerohedge.com:
The combination of low interest rates and “an explosion of debt” has become the biggest risk to the world’s economies, according to the head of Canada’s Global Risk Institute.
“These low interest rates could have the potential to be the next serious issue faced by countries and it’s because debt is exploding everywhere,” Richard Nesbitt, 60, chief executive officer of the group that researches risks to the financial industry, said Monday in an interview in Bloomberg’s Toronto bureau.
“There’s debt being piled upon debt being piled upon debt.”
Since the middle of 2015, central bank balance sheet expansion has once again led to a collapse in sovereign bond yields, further encouraging global corporate debt to surge…
As the majors plunge into negative rates…
Global debt has climbed about 37 percent since the 2008 financial crisis, Nesbitt said, as central banks around the world have pushed interest rates down to stoke growth and even below zero in the case of Japan and some of Europe’s central banks.
Enticed by record-low interest rates, companies increased total debt by $2.81 trillion over the past five years to a record $6.64 trillion. In 2015 alone, liabilities jumped by $850 billion, 50 times the increase in cash by S&P’s reckoning.
And as SocGen showed last year, all the newly created debt in the 21th century has gone for just one thing: to fund stock buybacks.
To continue reading: “It’s An Alice In Wonderland World” – GRI Warns “Debt Is Being Piled Upon Debt Being Piled Upon Debt”
