Global Debt Crosses $100 Trillion, Rises By $30 Trillion Since 2007; $27 Trillion Is "Foreign-Held"

Tyler Durden's picture

While the US may be rejoicing its daily stock market all time highs day after day, it may come as a surprise to many that global equity capitalization has hardly performed as impressively compared to its previous records set in mid-2007. In fact, between the last bubble peak, and mid-2013, there has been a $3.86 trillion decline in the value of equities to $53.8 trillion over this six year time period, according to data compiled by Bloomberg. Alas, in a world in which there is no longer even hope for growth without massive debt expansion, there is a cost to keeping global equities stable (and US stocks at record highs): that cost is $30 trillion, or nearly double the GDP of the United States, which is by how much global debt has risen over the same period. Specifically, total global debt has exploded by 40% in just 6 short years from  2007 to 2013, from "only" $70 trillion to over $100 trillion as of mid-2013, according to the BIS' just-released quarterly review.

It should come as no surprise to anyone by now, but the only reason why global stocks haven't plummeted since the Lehman collapse is simple: governments have become the final backstop for onboarding risk, with a Central Bank stamp of approval - in other words, the very framework of the fiat system is at stake should global equity levels collapse. The BIS admits as much: “Given the significant expansion in government spending in recent years, governments (including central, state and local governments) have been the largest debt issuers,” according to Branimir Gruic, an analyst, and Andreas Schrimpf, an economist at the BIS.

It should also come as no surprise that courtesy of ZIRP and monetization of debt by every central bank, debt has itself become money regardless of duration or maturity (although recent taper tantrums have shown what will happen once rates start rising across the curve again), explaining the mindblowing tsunami of new debt issuance, which will certainly never be repaid, and whose rolling will become impossible once interest rates rise. But of course, under central planning that is not allowed. As Bloomberg reminds us, marketable U.S. government debt outstanding has surged to a record $12 trillion, up from $4.5 trillion at the end of 2007,  according to U.S. Treasury data compiled by Bloomberg. Corporate bond sales globally jumped during the period, with issuance totaling more than $21 trillion, Bloomberg data show.

And as we won't tire of pointing out, China's credit expansion over this period is easily the most important, and overlooked one. Which is why with China out of the epic debt issuance picture, and with the Fed tapering, all bets are slowly coming off.

 

Bloomberg also comments, humorously, as follows: "concerned that high debt loads would cause international investors to avoid their markets, many nations resorted to austerity measures of reduced spending and increased taxes, reining in their economies in the process as they tried to restore the fiscal order they abandoned to fight the worldwide recession." Of course, once gross government corruption and incompetence made all attempts at austerity futile, and with even the austere nations' debt levels continuing to breach record highs confirming there was never any actual austerity to begin with, the push to pretend to reign debt in has finally faded, and the entire world is once again engaged - at breakneck speed - in doing what caused the great financial crisis in the first place: the issuance of record amounts of unsustainable debt.

All of the above is known. What may not be known is just who is issuing, and respectively, purchasing, this global debt-funded spending spree, especially in a world in which one's debt is another's asset. Here is the BIS's answer to that question:

Cross-border investments in global debt markets since the crisis

Branimir Grui? and Andreas Schrimpf

Global debt markets have grown to an estimated $100 trillion (in amounts outstanding) in mid-2013 (Graph C, left-hand panel), up from $70 trillion in mid-2007. Growth has been uneven across the main market segments. Active issuance by governments and non-financial corporations has lifted the share of domestically issued bonds, whereas more restrained activity by financial institutions has held back international issuance (Graph C, left-hand panel).

Not surprisingly, given the significant expansion in government spending in recent years, governments (including central, state and local governments) have been the largest debt issuers (Graph C, left-hand panel). They mostly issue debt in domestic markets, where amounts outstanding reached $43 trillion in June 2013, about 80% higher than in mid-2007 (as indicated by the yellow area in Graph C, left-hand panel). Debt issuance by non-financial corporates has grown at a similar rate (albeit from a lower base). As with governments, non-financial corporations primarily issue domestically. As a result, amounts outstanding of non-financial corporate debt in domestic markets surpassed $10 trillion in mid-2013 (blue area in Graph C, left-hand panel). The substitution of traditional bank loans with bond financing may have played a role, as did investors’ appetite for assets offering a pickup to the ultra-low yields in major sovereign bond markets.

Financial sector deleveraging in the aftermath of the financial crisis has been a primary reason for the sluggish growth of international compared to domestic debt markets. Financials (mostly banks and non-bank financial corporations) have traditionally been the most significant issuers in international debt markets (grey area in Graph C, left-hand panel). That said, the amount of debt placed by financials in the international market has grown by merely 19% since mid-2007, and the outstanding amounts in domestic markets have even edged down by 5% since end-2007.

Who are the investors that have absorbed the vast amount of newly issued debt? Has the investor base been mostly domestic or have cross-border investments grown at a similar pace to global debt markets? To provide a perspective, we combine data from the BIS securities statistics with those of the IMF Coordinated Portfolio Investment Survey (CPIS). The results of the CPIS suggest that non-resident investors held around $27 trillion of global debt securities, either as reserve assets or in the form of portfolio investments (Graph C, centre panel). Investments in debt securities by non-residents thus accounted for roughly one quarter of the stock of global debt securities, with domestic investors accounting for the remaining 75%.

The global financial crisis has left a dent in cross-border portfolio investments in global debt securities. The share of debt securities held by cross-border investors either as reserve assets or via portfolio investments (as a percentage of total global debt securities markets) fell from around 29% in early 2007 to 26% in late 2012. This reversed the trend in the pre-crisis period, when it had risen by 8 percentage points from 2001 to a peak in 2007. It suggests that the process of international financial integration may have gone partly into reverse since the onset of the crisis, which is consistent with other recent findings in the literature.

This could be temporary, though. The latest IMF-CPIS data indicate that cross-border investments in debt securities recovered slightly in the second half of  2012, the most recent period for which data are available.

The contraction in the share of cross-border holdings differed across countries and regions (Graph C, right-hand panel). Cross-border holdings of debt issued by euro area residents stood at 47% of total outstanding amounts in late 2012, 10 percentage points lower than at the peak in 2006. A similar trend can be observed for the United Kingdom. This suggests that the majority of new debt issued by euro area and UK residents has been absorbed by domestic investors. Newly issued US debt securities, by contrast, were increasingly held by cross-border investors (Graph C, right-hand panel). The same is true for debt securities issued by borrowers from emerging market economies. The share of emerging market debt securities held by cross-border investors picked up to 12% in 2012, roughly twice as high as in 2008.

* * *

Source: BIS

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kodachrome's picture

Neo & Bee will be the answer.

BigJim's picture

 ...that cost is $30 trillion, or nearly double the GDP of the United States, which is...

I'm confused. Isn't much of that debt then spent on products & service that get counted towards GDP? So if they hadn't added all that debt, GDP would be commensurately lower?

All this debt would be fine if it were being spent on stuff that would expand the economy's actual productivity (CAPEX?). Can we see how much of this debt-fuelled spending is 'productive', even if only nominally? 

BaBaBouy's picture

$100 Trill ???

It'S OK.....
A Few Million More Ozs. Of Fictitious Paper GOLD Otta Cover It...

SafelyGraze's picture

the hundred trillion in debt is more than offset by the six hundred thousand tonnes of gold in the sacks removed from the basement of the vatican where the elongated-head people live

hugs,
JFKs sewer-sniper 

HisNameIsRP's picture

That imf lady batshit crazy

SafelyGraze's picture

who you calling "lady"

hugs,
ka-ren of earth

and also ps, it's worldbank. not imf. 

get it straight.

 

TruthInSunshine's picture

5 year fictional narrative of "recovery," told by monkeys printing massive reams of fiat paper, in order to reflate asset bubbles & get the serfs to assume/consume MOAR debt - and if the individual is reluctant to awesome more debt, the financial entities that own "sovereign governments" will force their government puppets to assume more debt (and pay outlandish prices on things that are not needed) & try to shift the burden to said individual (via taxation, present & future).

It's all nothing but a simple illusion, created by the oldest method in the fractional fiat reserve bankster's playbook, and it will inevitably lead to the next, bigger "popping" sound.

It's on continuous loop, now.

"Debt is the money of slaves."

There are more & more debt slaves with each & every passing day.

CPL's picture

That's just the stuff on the books that people have actually publically stated for the record.  100 trillion is chump change to the real number.  not even a 1/10th of a percent of the real debt.  The number 1.2 quadrillion has been around since 2006.

2006 - http://www.hkex.com.hk/eng/stat/research/rpaper/Documents/GlobalDer_e.pdf

2010 - http://www.dailyfinance.com/2010/06/09/risk-quadrillion-derivatives-mark...

2012 - http://www.globalresearch.ca/financial-implosion-global-derivatives-mark...

2014 - http://americablog.com/2013/03/the-worldwide-derivatives-market-could-be...

In reality the debt market is closer to 3.7 Quadrillion dollars judging from the idea that if you stop counting it, then appearently it doesn't matter anymore.  Right now, no one on this planet has a pot to piss in.  The money in ALL your banks in EVERY country, the cash in your wallets, the homes you live in, the buildings you work in and the cars you drive.  Everything that you are and will be for 1000 years couldn't ever start to cover the interest alone.  That's the situation, not even gold or silver will cover the debts incurred by all that helped promise money they did not have.

There is no economy, hasn't been thanks to the Bush family nazi's inbreeder scum, their worthless friends and ever one of his twisted shit eating business partners.  Every last one of them...there will be no uhaul behind the hearse and no boatman to ferry for any of them unless some serious remediation starts happening.  They are all considered theives and bandits until they prove themselves otherwise.

headhunt's picture

You lost me at 'Bush family nazi's inbreeder scum'. What?

skwid vacuous's picture

the first time I hear "Quintillion" I'm heading to the bunker... 

Kayman's picture

Don't confuse GDP (the stuff that is supposedly "produced") with GNI-Gross National Income (the source of expenditures).  Between ongoing government deficits and the trade deficit we have $1 trillion to $1.5 trillion we consume that we don't actually earn, every year.

And because one person's debt is someone else's "asset" the question becomes- what is the earning asset that pays interest on that debt ? I think we are well beyond the point where earnings can pay interest. Only printing and asset inflation can pay the exponential/incremental interest.

The slaves can't work 25 hours a day and the parasites are blissfully oblivious to the plight of the host.

cynicalskeptic's picture

so... if the TOTAL WORLD GDP is less than $100 trillion doesn't this mean there's no way in hell to EVER get out from under this pile of merde?

.... well, short of defaults or hyperinflation...

Kirk2NCC1701's picture

Don't sweat it: We got hundreds of $Trillions of Derivatives backing this Debt.

Do I really need to add a 'sarc' tag?

Smegley Wanxalot's picture

Do you really want the saddening answer to that question?

Jumbotron's picture

MOAR is always better .  ;-)

headhunt's picture

Back around 1999 I was approached about investing in a derivative based investment, when i pushed to find out what I was really investing in at first they couldn't really tell me other than broad strokes like 'real estate' when I pushed for specifics they laughed at me for my ignorance. Sometimes ignorance is bliss.

Kayman's picture

For you it might be sarcasm but for the banking cartel they are deadly serious.  Watch the spinning top- it can't fall over.

Ban KKiller's picture

Could not happen without the crooked accounting class and their criminal masters....Banksters.

Tune in, turn on, drop out. Makes more sense then ever. Or take up arms and create the total police state.

Long "Depends".

RaceToTheBottom's picture

Accountants may not be the guards at Dachau with their hands on the gas valves, but they run the trains that deliver the Jews and Slavs there.

Especially the Accounting organizations that have modified the accounting rules.

They should be treated as part of the "team"

Berspankme's picture

Deficits don't matter

Arius's picture

what do you mean?  are you sure?  is this kind of thinking which is bringing this country down to its knees ... i did not think it could happen over here, but when i hear these kind of thinking it makes me wonder...people never change!

Kirk2NCC1701's picture

People don't get (your) sarcasm?

Judging by the responses to Dick(head) Cheney's famous quote that I've seen here on ZH, even many a ZHers don't truly understand the Monetary System. 

A part of their brain is still "stuck" in the Old Paradigm of 'Honest Money', where Debt did matter.  But we haven't been in that Paradigm since Aug.15, 1971, so it's about (fucking) time that some ZHers woke up to the New Paradigm (Dishonest Money) and its implications:

US Deficits "don't matter" if your currency is the Global Reserve Currency:  You are exporting inflation, as you issue more Currency.  Which is exactly what's happening.

headhunt's picture

Exporting inflation by deflating the US citizens income and savings

moneybots's picture

"US Deficits "don't matter" if your currency is the Global Reserve Currency:  You are exporting inflation, as you issue more Currency.  Which is exactly what's happening."

 

IF. 

 

For each action there is an equal and opposite reaction.  Inflation causes deflation.

Deficits do matter, as exporting inflation results in things like the Arab Spring, when people get bent out of shape over things like high food prices and people start overthowing governments and wars happen.  We could be heading toward a 3rd world war, due to" deficits don't matter."

cynicalskeptic's picture

You're exporting inflation ONLY for as long as others accept your dollars.

When the $US is no longer accepted by others - when they lose faith in tha ability of the US to actually pay its bills (eg issue unlimited debt), all those dollars oveseas come rushing back home to the US  - and no gun can keep THAT from happening.  When those dollars come rusing back - with no nation wanting to be last in line exchanging those dollars for tangible assets (ANYTHING of tangible value) you're going to see Zimbabwe style inflation.

Think about it... you as a nation - or corporation - or individual - are holding dollars but those dollars are losing value .......   if they start to lose value fast enough you're going to want to exchange them for SOMETHING else.  In the past whenever a currency failed there wer alternative 'stores of value' - the French held gold or silver when Law's franc went to hell.....But we're not talking about Yugoslavian Dinars or Zimbabwe dollars - there aren't any more German Marks to buy (the favored store of value in Yugoslavia) and nowhere's near enough South African Rands (a refuge for Zimbabwe)...  

if the $US goes there is NO ALTERNATIVE STORE OF VALUE big enough to accommodate the demand.  Euros?  no, Swiss Francs?  nope... Norwegian Krone?  uh, huh..... 

You'll see foreigners cashing in dollars for US real estete, stocks, ANYTHING they can possibly BUY with $US - even as the price of anything in dollars soars because it's better to own SOMETHING of value instead of worthless paper.  

The ONLY real 'alternative' to hyperinflation is a DEFAULT because you can't FORCE people to accept dollars at the end of a gun and you can't prevent them from trying to convert their dollars into tangible stores of value 

Kayman's picture

You can only export inflation so long as other countries accept your freshly printed currency. From the world's largest creditor nation to the world's largest debtor nation- all floated on printing dollars.

FieldingMellish's picture

To paraphrase Eddie George:

 

"Equity valuations are a matter of opinion, debt is real."

Seasmoke's picture

The Titans Running Back ????

Kirk2NCC1701's picture

Not true, but nice attempt at the Jedi Mind Trick.

Debt is also a "matter of opinion" -- as are ALL laws of man.  Which is why we keep changing them, in case you haven't noticed or read history.

The Laws Nature:  Not a "matter of opinion". 

Try defying gravity sometimes and tell yourself that you can fly like Superman (as happens to some drug addicts), go to a Manhattan highrise, take a Bankster friend by the hand, jump off, and tell me the outcome.

headhunt's picture

'Banksters' have friends?

The results would be one dead ZH commenter and an additional conspiracy article about a bankster dying prematurely.

Chupacabra-322's picture

American law is a tricky thing to understand. Almost all people don’t understand what the 14th Amendment really means, and that is because the words used have legal definitions which typically aren’t the definitions found in a normal dictionary. The use of words that have multiple legal meanings fuels the power of the 14th Amendment. For starters, there is a legal difference between the “United States” and the “united States.” Legally, the “united States” are the unity of the sovereign States of America. The “United States” is actually referring to a corporation, a.k.a. “The United States of America.” The “united States” is the abbreviated form of “united States for America.” The “United States of America” is the name used in the Constitution to describe the federal government, not the States that are united. The purpose of the old 13th Amendment was to keep those with titles of nobility – in other words, representatives of Britain – out of the government of the United States of America – being the federal government – by not allowing them to be citizens of the united States, a Constitutional prerequisite for office.
Section 1 of the 14th Amendment was an attempt to tie the sovereign American of the united States to the United States federal government. Doing so required the change in the definition of what a Citizen is: we see the case of “Citizen” was changed to “citizen.” The American “Citizen,” addressed in earlier parts of the Constitution, was replaced by the 14th amendment title of “citizen.” This was a necessary step for controlling the people because before this time, there was no tie between the federal government and the Citizen of a State. States were like countries of their own, only the federal government acted as a mediator between them. The 14th Amendment made people citizens of both their States and the federal government, subjecting them to both entities’ laws. The other key element is the use of the word “person” or “persons,” which is distinguishable in law from “people.” The word “person” has three legal definitions, the third of which being the confusing factor: “3. An entity (such as a corporation) that is recognized by law as having the rights and duties of a human being. In this sense, the term includes partnerships and other associations, whether incorporated or unincorporated.”[8] In short, person can also mean a corporation. So, looking back at the 14th Amendment, one can reword the first line “All corporations born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.” A 14th Amendment “citizen,” as we shall later see in much greater detail, can and commonly does refer to a corporation.[9]

Miggy Miggy • 2 hours ago
Being incorporated, people need permission to use Britain’s imposed laws. These people, who use this British legal system for and usually against the American people, are referred to as attorneys, as opposed to lawyers. Yes, there’s a difference. The word “attorney” comes from “attorn,” which means to turn over to another; transfer.[17] In old England, the title of attorney meant one who attorned (“attourned” is the old English), which meant to transfer money, goods, etc. to another.[18] Attorneys served the king or queen in handling disputes regarding money/goods with their peasants. In modern times, attorneys transfer things of monetary value through court procedures to both other forms of money/goods and to new owners, being either persons or the government.[19] Attorneys have limited legal power because they are sworn to uphold the British, copyrighted law. A lawyer isn’t limited like this. Many believe that one needs to get licensed in order to practice law – this is an utter fiction. One needs to become licensed if one wishes to become an attorney in order to avoid a copyright violation[20], and the way to do this is to pass the BAR exam and register with the American BAR Association. The American BAR Association is an appendage of the BAR Council, which is the BAR association of England. The term BAR is an acronym for British Accreditation Register[21]: the registry for those who have been accredited to use America’s British copyrighted law.
Beyond this point in America’s legal history, any laws that came about were private laws of Britain. Any sovereign Citizen is exempt from these private laws. Anyone who doesn’t dispute being a 14th Amendment “citizen” is subject to these private laws. The 13th Amendment eliminated involuntary servitude, but it said nothing about voluntary servitude. The 14th Amendment was a gateway for voluntary servitude to take place. At this time, simply claiming to be a sovereign Citizen and not a 14th Amendment “citizen” was, legally speaking, enough to avoid being subject to Britain’s private laws. How could the Brits get people to agree to be these citizens? The answers they found were implemented into a plan that materialized into the New Deal.

http://www.examiner.com/article/u-s-economic-history-that-ron-paul-wants...

Kayman's picture

Kirk

Nail on the head, nail on the head. Once personal savings are elbowed out of the way and substituted by Central Bank conjuring- then the whole game is contrived.

Interest-earnings- are paid to the cartel members for doing nothing. They have not produced anything, but can charge interest for an accounting entry. In any other business it would be a crime.

Cognitive Dissonance's picture

I can't wait to see how this ends.

<With a bang or with a whimper?>

MeMongo's picture

This has to be bullish! Right?

Sarc/

freewolf7's picture

Eveyrbody has a plan until they get punched in the face.

headhunt's picture

When quotes from Mike Tyson succinctly describes your countries coming economic end, we are toast

blindman's picture

it ends with inflation of your financial
obligations and no income, then it will
be up to you to either bang or whimper
or continue the laughing nightmare.
of course i use the collective you here.
.
the capital of savings , with all this zero
interest and real inflation, is making the
savings of this generation non capital.
capitalism with no respect for savings
is something entirely different. it is the
execution of the basic unit of measure,
the petro-dollar.
so there it is, the central banks are
lording over the process, aka fascism.
the markets are just a house of mirrors
and the money is being destroyed,
the reset cometh ..... overnight, like
a thief in the night and all that.
right in front of our eyes but we refuse
to accept the thought of it.
.
since 2008, the failure of credit money and markets
due to abuse of fraud and phony derivatives and
the math-u- fuckation of credit creation, it has all been
propped up by the vapors of fear and money stealing-printing,
killing the dollar in broad daylight. look away, look away
dixieland.
.
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2014/3/8_Ge... /Gerald%20Celente%203%3A8%3A2014.mp3
.
http://www.paulcraigroberts.org/2014/03/07/jobs-economy-prospects-peace-... berts/
.
http://www.silverdoctors.com/jim-willie-ukraine-is-the-waterloo-event-fo...
.
the laughing nightmare continues.
the root of all evil is having its day
.
actually, i think it already ended, just
for the lag time of oxygen depletion that
has already been bound up in the blood stream.
.
so i guess the whimpers have it, there will be
no oxygen or energy for a bang, or, have i missed
something essential?

blindman's picture

"god help the beast in me." ....
.
Johnny Cash - The beast in me
http://www.youtube.com/watch?v=T8tGCVavS5s
.
Are You Crazy To Continue Believing In Collapse?

That it hasn't happened yet doesn't mean you're wrong
by James H. Kunstler
Wednesday, March 5, 2014, 5:16 AM
http://www.peakprosperity.com/blog/84902/crazy-continue-believing-collapse
.
"...The fraud is present in the abuse and misrepresentation of official statistics used as metrics in government policy, in the pervasive accounting chicanery of that same government in its fiscal dealings, as well as in our leading financial institutions and corporations, including control fraud in banking, interest rate rigging, mortgage and title fraud, front-running, naked shorting, re-hypothecation, money laundering, pumping-and-dumping, channel stuffing, the endless innovation of swindles, and, most importantly, the fundamental mispricing of the cost of money, which reverberates through everything else, most particularly real estate, stocks, and bonds. Beyond that, in the shadows of the shadowland known as shadow banking, a liminal realm of secrets and intrigues, only a few are privileged to know what is going on, and you can be sure they only know their end of the trade — while immense sums of ever more abstract “money” slosh through the derivative sewers on their way to oblivion in the ocean of failed trust.

So, don’t feel bad if this colossal armature of folly still stands, and have faith that the blinding light of God’s judgment will eventually shine even unto the watery depths where failed trust has sunk. Sooner or later the relationship between reality and truth re-sets to the calculus of what is actually happening." j.k.

Jam Akin's picture

When Kunstler mentions God in such fashion the end must truly be near!

Fix It Again Timmy's picture

Hold it!  Wait a minute!  $100 Trillion in debt means that there is $100 Trillion dollars in assets, phew!  I feel much better now!...............Moar debt!!!!!!!!!!

FieldingMellish's picture

If you want to rehypothecate your debt, you can keep rehypothecat(ing) your debt.

 

venturen's picture

just print a coin for that...Krugman

Its_the_economy_stupid's picture

The more I learn about debt and derivative insurance instruments, the more I think about LLoyds of London, the reinsurance business and fees generated and the studied, masterminded destruction of the English middleclass as the inner circle of Lloyds partners laid of risk on the "unwashed" Names that were invited late to the party.

Bad things are coming.

Kayman's picture

Its_the_economy...

A friend of mine had a portable wood grinder burn up that was insured through Lloyds. It's been 6 months now and they are running him throught the maize.  Classic Lloyds- their first call is to their lawyers to find some fine print so they don't have to pay you.

 I had a building collapse about 20 years ago- unknown to me the engineer miscalculated the steel trusses. There was a clause in Lloyds insurance contract that said that they didn't have to pay for any loss from faulty material, faulty workmanship, faulty design or latent defect. I told them that means any loss would not be covered and they were fraud artists.

 Naturally, they offered to return the premiums and walk away.  My partner in that business paid more than $300,000 in legal fees before those sons-of-bitches at Lloyds finally paid up. 

After a substantial loss most people don't have the resources to fight those bastards. 

I don't know how Lloyds continues to sell insurance- they're right there to collect premiums but will fight you to your last breath before you ever collect.

I am Jobe's picture

Wait, but prices of IPHONEs, IPADS, Notebook, Laptops, Tablets are all down.

BULLISH one must say. Borrow more and keep up with Technology 

Seasmoke's picture

Doesn't seem like the rug is covering that bump that was swept under it the past 6 years.