Global debt soars to 356% of GDP

[Hippocrypto]

I don't have any debt right now. I feel I'm missing out, if there is some inflation in the end, it's better to have some debt at a low fixed rate, then inflation will basically pay back your debt. If you're fiat rich on the other hand, inflation will eat your savings.

So sad on that matter, maybe I shouldn't save fiat if that's the case that I'll be storing money at the bank due inflation. This is the real thing about having savings, much better having our own vault security in order to secure our funds rather than entrusting that money on some banks. But if you're with crypto investment like bitcoin, huge profit awaits but in long term basis.

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[ChiBitCTy]

As sad as it has been seeing the national debt of the United States growing larger and larger over time, it sure has been about the best thing to happen to bitcoin that's possible.  We continue to print money as if it is a never ending source without and consequences at all, but as we all know there comes a point where enough is enough. 

The F35 being mentioned here is a big one for me..we've got to stop wasting so much on war..it's just not necessary.

[el kaka22]

Honestly I feel like this was already a problem, of course numbers weren't this drastic but it was already a problem, it never made any sense at all and it still makes no sense that there is this much debt. Of course the debt is for the future, most of that debt is not "should be paid right now" debt, most of it is "debt that will be paid later" debt and that is why people keep postponing it time and time again which is going to eventually boil up and blow up.

Mortgage crisis was nothing compared to this debt one, eventually one day banks will collapse under heavy debt and all other places that have debt will just find a way to keep not paying without anything happening to them. That is why I think it is quite important that we do not end up living under debt ourselves, but realize that debt is not as bad as you might think considering the whole world is in an unpayable debt.

[mindrust]

The FED has printed 40% of its total money supply last year. What does that tell you? Few days ago there was another news showing the Chinese ships arriving at the California bay. Hundreds of them.

The US is buying everything from China and selling their currency in return which they print for free.

Anyone knows a bit of math can see how that's going to end.

They should hang whoever came up with the idea of outsourcing their production to China.

[Twentyonepaylots]

It's bound to happen, COVID and literally hundreds to thousands of companies closing due to lack of workforce and the fact that lack of funding. Now provided that small companies recover after this surely the economy is bound to bounce back. So the best move for each country is to ensure that the number of new cases is minimized and prevented as well as to ensure that internal economy is at least kept in check.

[wxa7115]

To be honest these numbers aren't too bad. When you take a loan to buy a home, the loan is often 5 years of your total income, sometimes more. So that comes out at 500% debt, yet it doesn't scare us.

You have a point, however when you take a private loan like that you are expected to pay it and over time you're going to see that debt ratio being reduced as you keep paying the loan, when was the last time that governments reduced the level of debt that they had in a significant manner? Because I don't remember it, governments are borrowing money at a rate that is unsustainable and it doesn't seem as if they have any kind of intention of ever paying up those debts.

Which means that a new economic crisis that affects the whole world is basically inevitable, this is why people should prepare themselves, but this time this crisis is going to be different, most of the time people save their fiat expecting to protect themselves that way but I really think that all of those people that choose fiat in order to protect their wealth are going to be destroyed, which is why you need to find a store of value and whether you use real estate, precious metals or cryptocurrencies is not really that important, what matters is that a significant amount of your wealth is invested in one of those assets so you do not lose everything.

[aesma]

Well Germany for example was paying back its debt before the Corona crisis, and at a rapid rate. Granted, it's more of an exception than the rule, but if really debt becomes a problem, but the economy is doing OK, I could see a global, concerted effort to reduce government debts.

It was crazy that Trump was making huge deficits despite the US economy being OK, the first 3 years of his term...

[AmoreJaz]

It's bound to happen, COVID and literally hundreds to thousands of companies closing due to lack of workforce and the fact that lack of funding. Now provided that small companies recover after this surely the economy is bound to bounce back. So the best move for each country is to ensure that the number of new cases is minimized and prevented as well as to ensure that internal economy is at least kept in check.

that news is really not surprising anymore. global population experienced this pandemic crisis for the first time in most of our lives. definitely, there will be problems that we will encounter here. but give it few years, and a lot will recover. this situation is not forever esp once this vaccine has been rolled-out to large percentage of population.
at least humanity is still alive and not been wiped out. so we still have hope here.

[Coinsfera]

The world's debt-to-GDP ratio rose to 356% in 2020, a new report from the Institute of International Finance finds, up 35 percentage points from where it stood in 2019, as countries saw their economies shrink and issued an ocean of debt to stay afloat.
Why it matters: The increase brings numerous countries, including the U.S., to extreme debt levels, well beyond what economists have called untenable in the past.

If Covid does not end soon, the amount of debt will increase to records degrees. Poor countries will get loans to pay for vaccines and it will make their poor economies worse. In financial markets, there is a huge boom. Each index records its ATH price and it seems that something undesirable will happen. If that happens concurrently then there will be a great depression. However, we hope that these events will not happen.

[brightemo]

The whole world live in debts and this normal while you have money to pay it

[LoyceMobile]

Who do they owe all this debt to?
Is the sum of all fiat money zero or negative?

[Lorence.xD]

Who do they owe all this debt to?

That was my question too, I couldn't even begin to fathom who does the world owe money. Maybe there really is an extraterrestrial race and the global leaders asks for some money and now they owe this extraterrestrial race and in exchange, they can go to our planet without a visa  . Kidding aside, this is not the most threatening thing because global debt as far as I know is not something that is being loaned for the purpose of getting it paid back, the people who loaned this are more interested on favor rather than the loan being payed with interests.

[Shasha80]

The COVID-19 pandemic is the cause of a number of countries competing to seek debt to save the economy. In fact, according to the articles
I read,  more than 100 countries applied for loans to the International Monetary Fund (IMF). No wonder global debt has increased by 356%,
especially if this  year the spread of the COVID-19 pandemic cannot be stopped. I can be sure that the global debt will be even higher next year.
Because the government will do all kinds of ways to restore the economy. The key is that the corona virus must be stopped as soon as possible,
so that global debt does not continue to increase.

[Mauser]

This should be very alarming to all of us. Countries keep on printing money without any real plans in place on how to pay back these funds. Your two charts are probably the best justifications on why the global monetary systems are doomed in the long run. This party is going to stop, there is no way this can keep on going on forever. Eventually people will wake up and just stop believing in the system. That is also why it is so good to invest in crypto currencies rather than FIATs.

[FanEagle]

The COVID-19 pandemic is the cause of a number of countries competing to seek debt to save the economy. In fact, according to the articles I read,  more than 100 countries applied for loans to the International Monetary Fund (IMF). No wonder global debt has increased by 356%, especially if this  year the spread of the COVID-19 pandemic cannot be stopped. I can be sure that the global debt will be even higher next year.
Because the government will do all kinds of ways to restore the economy. The key is that the corona virus must be stopped as soon as possible, so that global debt does not continue to increase.

All those nations actually pay a "tax" of sorts to IMF in order to get that debt when they need it. Not like IMF is filled with some rich people or it is not like it is just a bank you and I can go open a bank account and get a line of credit or something, IMF is built differently where nations put some money in there whenever they have to actually need it back and that is why whenever you are in trouble you ask for money as government.

The reality is that if you are a bad nation with no democracy and a dictatorship and no good economical future potential even if you pay them they may decline to give you a loan but that is a very high end situation since those nations can get money, it shouldn't' t be "debt" since they paid for it anyway.

[aesma]

Who do they owe all this debt to?
Is the sum of all fiat money zero or negative?

Well the debt is denominated in sovereign bonds. If you have a life insurance, a pension fund, all kinds of investments, you probably own sovereign bonds. From your own country, and from other countries too (for example from countries that pay more interest, earning you more).

Then there are central banks who buy bonds from other central banks. Japan and China own tons of US treasuries for example.

[Sithara007]

You can check the federal debt on a real time basis here:

https://www.usdebtclock.org/

If I am not wrong, when Trump first came to power the debt was below $20 trillion. Four years later, it stands at almost $28 trillion. That is $2 trillion in debt added in each year during the presidential term. And the future projections are even more horrendous. Check this:

Now in the form of the COVID 19 pandemic, the governments around the world has got a stellar excuse to indulge in more and more debt creation.

[magneto]

I wonder if governments are still justifying their massive piles of debt with the excuse of "low interest environment therefore we don't need to worry about servicing costs on the debt" now that long term market rates on bonds have hiked again.

These are debt levels that have not been seen since WWII - and in some cases, totally unwarranted stimulus packages.

The result is highly inflated asset prices, arbitrary pump & dumps on random stocks, and a real risk of reflation gone wrong in the near future. You'd be delusional to think that this system is sustainable under this type of stress.

[Zurcermozz]

It's so sad that these things happened because of the Pandemic thing, imagine those people who are suffering on Povert. The rich people became rich, while poorer people became much poorer.

[jaysabi]

COVID has been the best thing to ever happen to Bitcoin, nearly every developed country relied on "borrowing" in order to mitigate the short term economic effects of COVID to provide relief, but at some point, you have to end up paying back the money you printed. You will see countries default and their currencies crash.

The most speculative tech stocks have risen in just about the same proportion as bitcoin since the start of the pandemic. There's been nothing inherently special about bitcoin in this regard. The money printer is raising the tide of all speculative assets at about the same rate.

Also, countries don't have to pay back the money that was printed. That's kind of the whole issue with central banks.