What do people here think of the global debt, which currently stands at us$157 trillion? What is the cause, and the implications?

Total global debt crossed a troubling event horizon by going past the $200 trillion mark last year. Given the latest figures we are likely well above a total global debt of $230 trillion based on a comprehensive study done by ING last year. The banking sector rummages for every possible way of accessing debt. Global central banks from the Fed to the ECB to the Bank of Japan are now fully engaged in a digital printing end game. It isn’t so much the startling debt figures that are presented but the GDP that is actually backing up this insurmountable level of debt. The latest data shows that total world debt is running above 313 percent of annual GDP.

To put this into perspective the US meltdown occurred when household debt reached about 120 percent total debt to annual GDP. The only way to keep payments current is with a low rate environment. There is no choice. So central banks will do everything they can to print this debt into oblivion. In many ways this is a reason that we have seen a rush into assets from commodities, real estate, art, Bitcoins, and anything that isn’t just a bunch of 1s and 0s on a central bank computer easily changed by the whims of politicians and those connected to them.

Total debt recall

One of the more interesting figures that I came across was that in 2000, every $2.4 of debt creation produced $1 of GDP growth. Today that figure is up to $4.6 for every $1 of GDP growth. In other words, the impact of debt creation is having less and less of an impact on real economic growth. Unless you live in the digital cloud, you care about the real economy.

Ultimately the health of an economy should be measured by good paying jobs and income growth. Since the recession ended in 2009 we have seen more growth in low wage jobs and income growth is not to be found. At the same time, the Fed has expanded its balance sheet to a whopping $4 trillion.

The balance is still 0, so in-reality there isn't much going on. The worrying part is that economics are no longer mathematics, but politics, and having a big-number, to scare people, to hold over people that can't do the math, usually results in the rich getting richer, and the poor backing down because the political-story ALMOST makes sense.

And that's dangerous, that's how from the Middle-Class down the US, and Europe are almost back to 3rd World level, the 3rd World is at their lowest point ever, and so on, basically we're watching normal-life run down the drain, while the wealthy, have never been more wealthy.

War, bad spending.

Long depression, and Keynes was wrong.