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Does Anyone Remember 2007? The Global Debt Bubble In 3 Ominous Charts
Seven years after the bursting of a global credit bubble resulted in the worst financial crisis since the Great Depression, debt continues to grow. In fact, as McKinsey explains in their latest report, rather than reducing indebtedness, or deleveraging, all major economies today have higher levels of borrowing relative to GDP than they did in 2007. They pinpoint three areas of emerging risk: the rise of government debt, which in some countries has reached such high levels that new ways will be needed to reduce it; the continued rise in household debt; and the quadrupling of China’s debt, fueled by real estate and shadow banking, in just seven years... that pose new risks to financial stability and may undermine global economic growth.
As Bloomberg's Simon Kennedy notes, since 2007, the IOUs of governments, companies, households and financial firms in 47 countries has grown by $57 trillion to $199 trillion, a rise equivalent to 17 percentage points of gross domestic product.
Government debt is unsustainably high in some countries - Debt is too high for either austerity or growth to cure
Since 2007, government debt has grown by $25 trillion. It will continue to rise in many countries, given current economic fundamentals. Some of this debt, incurred with the encouragement of world leaders to finance bailouts and stimulus programs, stems from the crisis. Debt also rose as a result of the recession and the weak recovery. For six of the most highly indebted countries, starting the process of deleveraging would require implausibly large increases in real-GDP growth or extremely deep fiscal adjustments. To reduce government debt, countries may need to consider new approaches, such as more extensive asset sales, one-time taxes on wealth, and more efficient debt-restructuring programs.
Household debt is reaching new peaks.
Only in the core crisis countries—Ireland, Spain, the United Kingdom, and the United States—have households deleveraged. In many others, household debt-to-income ratios have continued to rise. They exceed the peak levels in the crisis countries before 2008 in some cases, including such advanced economies as Australia, Canada, Denmark, Sweden, and the Netherlands, as well as Malaysia, South Korea, and Thailand. These countries want to avoid property-related debt crises like those of 2008. To manage high levels of household debt safely, they need more flexible mortgage contracts, clearer personal-bankruptcy rules, and tighter lending standards and macroprudential rules.
China’s debt has quadrupled since 2007.
Fueled by real estate and shadow banking, China’s total debt has nearly quadrupled, rising to $28 trillion by mid-2014, from $7 trillion in 2007. At 282 percent of GDP, China’s debt as a share of GDP, while manageable, is larger than that of the United States or Germany. Three developments are potentially worrisome: half of all loans are linked, directly or indirectly, to China’s overheated real-estate market; unregulated shadow banking accounts for nearly half of new lending; and the debt of many local governments is probably unsustainable. However, MGI calculates that China’s government has the capacity to bail out the financial sector should a property-related debt crisis develop. The challenge will be to contain future debt increases and reduce the risks of such a crisis, without putting the brakes on economic growth.
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As Kennedy concludes,
the new data make a mockery of the hope that the turmoil and subsequent global recession would put the globe on a more sustainable path.
McKinsey sees little reason to think the trajectory of rising leverage will change any time soon.
These challenges need to be addressed.
Yet if, as it appears, economies need ever-larger amounts of debt to grow, and deleveraging is rare and increasingly difficult, they may also need to learn to live more safely with high debt. That will require new approaches to manage and monitor it, to reduce the risk of crises, and to resolve private-sector defaults efficiently. Policy makers will need to consider more ways to reduce government debt, and it may be time to reevaluate how incentives in the tax system encourage the amassing of debt.
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So in summary we ask - Does anyone remember 2007?
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You forgot HSBC.
they are backed by drug money. dollars going to go up
Pffft, stop living in the past...2007 / 2008 were annomolies...never to be repeated again.
I still remember that Government cutbacks of 2010, and I have nightmares about it. Being furloghed was tough, but thankfully the population realized how important we are to thier way of life. We are now back at full strenth and better then ever, ready to serve you! You can thank me later.
Obama's penis is too long in that picture.
It is not that I've seen it, it is Michelle acts like a woman who has never been satisfied.
I would think the lack of an appropriate size dick is the primary cause.
Kardashian Bubbles
Debt Bubbles
Which bubbles do you think will burst first ?
Nice work! Thanks for a good chuckle.
Looks like Merkel has Hypoplasia, under development of breasts and chest cavity.
Of course:
In the first quarter of 2007, just before the burst of the big financial crisis, the US debt held by the Fed was 5.48% of GDP. Only one year later and in the midst of the crisis storm, in the third quarter of 2008, this figure drops dramatically to 3,21% of GDP. The decline over just one year period is 41.4% (!).
"From this point up today, there is an unprecedented rise of the US debt held by the FED. Specifically: In the first quarter of 2014, this figure is skyrocketing at 15,34% of GDP, which means a rise of 377,88% in six years!"
From your link
Thank you.
So blame it all on China? I love the smell of scapegoats in the morning.
Yes, that reeks of Anti-Sinaism
I thought Anti-semetic was when US Wars kills Arabic peoples in the war on terror including Iraqi women & kids, Yemenis, and Syrians.
They keep wracking up unrepayable debts to buy metals and energy that we keep shipping to them and they keep sending us rebadged USD paper with Chinese characteristics.
It's all good! Advanced economy donchaknow.
Are you implying bankers run the show, blasphemous!
<sigh...> Bullish.
"Seven years after the bursting of a global credit bubble resulted in the worst financial crisis since the Great Depression, debt continues to grow."
Then the bubble hasn't burst, yet. But it will.
how convenient for the maggots
shadoobee...shattered.
The markets need to be reset. Instead of allowing this to happen in 2007-2009, they just doubled-down on money printing and increasing debt. If you listen to 'alternative' economists like Peter Schiff, you will quickly realize that 2014 is alot like the economy was right before the last crash. The warning signs are there. The corporate media won't report on these figures. They failed to do so last time as well. It is coming soon!
Prepare while you are still able to do so. I recommend buying silver while the market is being manipulated downward. These candles with a silver coin make great gifts! (https://www.etsy.com/shop/ScentSavers?ref=hdr_shop_menu) They help raise awareness of real money and spread silver to more people. They will learn that a silver dollar is worth over 17 times face value!!!
Don't listen to corporate media. They only exist to serve their masters! And we, the people, are not their masters!
There is much truth to this...however
We're having a HUGE backup in the commodity space...and what "the Austrians" don't understand is indeed...you can have it all...BUT AT A PRICE.
And in the USA that price is LEVERAGE.
This is just PURE speculation on my part by EVERY "asset" you see (meaning price) is in fact the LEVERED price of the good...and not the actual price of the asset itself.
This is to me the "magic alchemy" of Wall Street...namely, "they over charge for everything."
And of course "enter the Government who is more than happy to over pay!"
This is why a collapse in oil prices is so terrifying in my view....a "disturbance in the Force" if you will....as a price collapse represents the kneecapping of the fundamental basis for the entire edifice namely...I can overcharge, under deliver...even fail to deliver...and the money will still be there.
Treasuries, gold, the dollar.
Move along....
Blessed are the meek and the PM holders,for they will inherit a debt free Economy...
The meek were abolished several years ago. They were converted into sub-prime debt slaves.
http://www.globalresearch.ca/editor-of-major-german-newspaper-says-he-pl...
nobody reads newspapers anymore. what a waste.
nobody reads anymore. what a waste.
there fixed it for ya!
Few comprehend what they read and fewer have critical thinking skills.
The truly rich just keep socializing their losses and the sheep keep getting sheared...
This is FALSE.
The next collapse (meaning in Oil) will be EVEN BIGGER.
Forget "shearing."
This will be a full scale economic SLAUGHTER.
silly to say that household debt to income in the US has decreased - income has increased for the top tier of the population, who have almost no debt, while incomes and debt levels have stagnated for the rest and remain near all time highs.
http://stockcharts.com/h-sc/ui
This debt "bomb" will hit us one day square in the jaw! The OTHER bomb to fuel endless wars is taking shape right now....
As I see it this is how I think events with "ISIL" will go down soon...
1. Our search and rescue units are moving into Iraq right in ISIL territory.
2. We have a "soldier" or airman or someone that looks like one get captured by ISIL.
3. They execute him in some horrific way such as setting them on fire, beheaded or maybe mauled by a pack of dogs.
4. Uproar by our "leaders" and idiot citizens leads us into the next stage of total mobilization and MOAR war...
My prediction
My prediction is: Drawn and Quatered. Makes for good video and two-minutes-of-hate inducing propoganda for this CISISA.
FOX should take a viewer's poll: "How do you want to see the next execution carried out". If they're going to work as ISIS' propoganda arm why not maximize viewer satisfaction?
They may already be rehearsing several different endings, in the desert, as we type. Then, when they get the results, they can run with the top vote 'getter'.
That is a solid prejection...will show the folly of not sending mroe ground troops in first. Obama is the master military commander, I wish they would listen to him. Obama was bluffing with his no boots on the ground comment. Bush got us into this mess and now Obama will do it right. We already pledged more than 4 trillion on these wars, obama gonna do it right!
But Dear Leader Obama has a pen and a phone. "Hello, chinaman... Our debts be cancelled. Later."
Yes, after 911 we became an "Expeditionary" Nation... not just our marine corps now.
A Military Republic with citizens who are ready to be expeditionary to fight the Global War on Terror, and harvest the Opium from Afghanistan.
A citizenry of tools.
- the separate and equal station to which the laws of nature and of nature's God entitle them
- unalienable rights: life, liberty, and the pursuit of happiness
- governments are instituted among men, deriving their just powers from the consent of the governed
- whenever any form of government becomes destructive to these these ends, it is the right of the people to alter or to abolish it
- in such form, as to them shall seem most likely to effect their safety and happiness
- that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed
No no no no no ..fuck the fed
"The Federal Reserve is lashing out at Sen. Rand Paul’s plan to give Congress more oversight over the central bank, a proposal that could gain traction in the new Republican-led Congress.
The Kentucky Republican reintroduced his “Audit the Fed” legislation last month with 30 co-sponsors, including other potential 2016 GOP hopefuls, Sens. Ted Cruz (Texas) and Marco Rubio (Fla.).
ADVERTISEMENTThe proposal — once championed by his father, former Rep. Ron Paul (R-Texas) —would subject the central bank to an audit by the Government Accountability Office (GAO).
Regional bank presidents from around the country are decrying the plan, which they argue could damage the economy.
“Who in their right mind would ask the Congress of the United States — who can’t cobble together a fiscal policy — to assume control of monetary policy?” Richard Fisher, president of the Federal Reserve Bank of Dallas, said during an interview with The Hill.
Fed Chairwoman Janet Yellen has already vowed to fight the legislation, and President Obama would likely veto it."
if the fed is doing such a good job where the heck is all that debt they hold coming from-not their policy I am sure they will say.
obviously the problem was that there wasn't enough debt ...
There is not one soul with the un-fed, ECB, IMF, Banksters etc... That cares about or even gives minor consideration to the MASSIVE debt that has been and is being created. That is not in their thought process, period. Has nothing to do with their decisions, no matter what is said.
Debt is not their problem...It's everybody elses!
They will not change, who cares if it's 200 trillion or a quadrillion?
In the end it's all the same! It may take a whole lot longer, but the day of reckoning will come.
It will be nasty!
Cares about? Yes they do. It's their means of enslavement. For example, you don't want to over load a camel, mule or pick-up truck. That's the extent to which they 'care'.
Nice Video...
2007??? Over half of the trading algorithms used today weren't even BORN in 2007!
The hyperinflation is going to rip people's faces off, I do believe. When it starts, the momentum will build so fast as to cause whiplash!
That loaf of bread is gonna cost $100 bucks instead of $1.25, and so on. you want a "Fun Size' Snikers bar? I have one for you...at $30.....
IF we get to that point, there'll be mass chaos, dogs and cats living together, lots of bullitz flighing around...general zombieland.
More dancers - keep the sheeple's mind off of everything with more dancers (and less clothing)
Need to keep the bread and circus gravy train going.
THIS is news ZH should be highlighting:
Fed fires back at Rand Paulhttp://thehill.com/policy/finance/231822-fed-fires-back
excerpt:
"The Federal Reserve is lashing out at Sen. Rand Paul’s plan to give Congress more oversight over the central bank, a proposal that could gain traction in the new Republican-led Congress.
The Kentucky Republican reintroduced his “Audit the Fed” legislation last month with 30 co-sponsors, including other potential 2016 GOP hopefuls, Sens. Ted Cruz (Texas) and Marco Rubio (Fla.).
The proposal — once championed by his father, former Rep. Ron Paul (R-Texas) —would subject the central bank to an audit by the Government Accountability Office (GAO).
Regional bank presidents from around the country are decrying the plan, which they argue could damage the economy."
Translation: The Fed wants complete control... and to hell with anoyone challenging their autonomy.
FedFUBARtoHell.
The Fed has complete control. The day they are eliminated we can restore, until then yep, FUBAR.
Governments bailed out private banks in 2008.
It is time for them to return the favour.
The part about all this that scares me most is the ominous prospect of a future "wealth tax".... ie, a blatant asset grab.
FATCA put in place the infrastructure for this. It is coming...
Physical gold is one thing they're going to have a hard time snatching back or taxing you on. Just a thought.
That was baked in 35 years ago for those who studied the numbers, the demographics and trends.
All of the above have worsened.
On a long-enough timeline, you become too great a looted burden and the government kills you.
Death Panels have always been inevitable for 75 million boomers. Savings just prolongs the drop and which trapdoor on the gallows get you.
Baby boomers are so brainwashed they will think it's their idea!
http://business.time.com/2013/08/14/a-good-death-how-boomers-will-change...
That last paragraph was total bullshit. Doesn't matter if that's what they need. "New approaches"? PLEASE! There is NO MONEY! You can't keep creating something that isn't there in the first place and pretending it's real.
IT'S ALL GOING TO BE FUCKING DEFAULTED!!!!
End of story!
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Markets will outlive the debt bombs. National economies except for the heavy weights (US, China, Japan, EU) do not matter just collateral damages. So many trade ideas that you do not need the rest. Real economies do not stand any chance against the wild tails wagging the dogs.
Markets do not care about pains of Preys. Anyway, so many of them around who willingly embrace traps.