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Warning & Red Alert The Global Debt Bubble Could Burst Soon

Warning & Red Alert The Global Debt Bubble Could Burst Soon

World Economy is in debt trap

The world economy is driven by debt market.

Irrespective of country earning or debt paying capacity.

Most of the countries are on the verge of piling a maximum limit of debts which is about to be burst soon.

Corona Virus and stalled business activities are making debt picture more grim and gloomy.

There are three types of debts Public debt, household debt, and external debt.

Gross government debt is the most relevant data for discussions of government default and debt ceilings.

 Japan is the most indebted country in the world, with debt-to-GDP ratios of 236% and in public debt per capita income $102,503

Wikipedia

Public debt is all the money owed by the government to creditors.

Generally, governments worldwide take loan to pay for healthcare, education, infrastructure, pension, social welfare, and defense and bank interest payment.

Most of the time government tax revenue is lower than expectation while expenses are higher.

Increasing tax rate is not all time feasible for government especially during election, so government relying on debt structure.

May be it is easier to make debts than to raise taxes for governments worldwide.

In developed countries where the population is aging and pensions and health care spending increase in relation to tax revenues and GDP growth.

 In addition, almost everywhere, governments prefer to borrow money rather than raise taxes

In a public debt structure, a government is able to manage a primary surplus, excess tax revenue over planned expenditure, sufficient to repay what has been borrowed.

Having sufficient funds to pay all bills is very important for government to create a good goodwill among public and worldwide and especially to international credit rating agencies.

In a result, debts structure strategy is being promoted by governments worldwide.

If governments go through any financial crisis like 2008 economic crisis and current Corona Virus crisis.

GDP growth and employment opportunity constantly all time low and Repaying capacity of government decreasing worldwide.

Therefore, the cost of financing a huge debt becomes an unsustainable burden on the shoulders of future generations.

Wikipedia

2008 financial crisis brought the same debt crisis.

 However, the lesson has not been learnt from past debt crisis and once again governments are keep spending and borrowing regardless of income-expenditure balance to just show-off that all is well.

Low internet rate and stable market conditions worldwide encouraged government to keep increasing debt amount in their budget.

Therefore, most countries continued to increase debt burdens to meet their economical expenditures.

Due to Corona virus, trade war between the US and china world economy is already slow down.

As monetary conditions tighten across the world, the debt burden is set to grow unprecedentedly worldwide.

Japan a country with 128 million people has ageing populating problem.

A major chuck of budget is allocated for social welfare and public health sector.

Japanese national debt is more than twice its GDP, indicating that it may be in a difficult financial position.

The country’s economy is growing at a slower rate than economists have anticipated for years.

Consequently, its central bank has resorted to negative interest rates in an effort to stimulate the economy.

Greece, which is still recovering from the effects of its economic crisis still crippling with huge public debt.

Venezuela is going through an unprecedented economic crisis as crude oil price is all time low also having huge public debt.

Of the world’s major economic powers, the United States has the highest national debt.

Despite a growing economy and spending hugely on infrastructure.  

China, the world’s second-largest economy and home to the world’s largest population  1.4 billion has a manageable national debt ratio of just 51.21% of its GDP.

However, to continue develop the debt ratio of China will increase drastically in coming years..

Bhutan is a small Asian country with close economic ties to India is also having high debts National Debt $2.33 billion.

It is an only country in the world follow Gross National Happiness (GNH), but growing debts is worrying for upcoming generation and GNH policy.

Bhutan is mostly relying on tourism & hydro power project for its earnings. Unemployment rate is high and public pay lower tax and economy depends on debt financing executing by economic partner India.

The  governments  worldwide spends a whopping amount of its annual budget just repaying the interest payments on its debt, which significantly reduces the amount of money available to pay for other programs.

In order to repay such a massive debt, the government could decrease spending, which could impede economic growth, or increase taxes to raise revenue

Over-leveraged property,  share price of blue chip companies,  low interest rate and  all time low demand for products and services pushing world economy into a financial crisis.

It seems that third world war will not be fought with nuclear weapons but with debt financing, imperialism and monopoly on banking services, manipulating on share market and by controlling world commodity and crude oil prices.

Developed or developing all countries facing slow economic growth and high unemployment levels.

Revenues and earnings are all time low while spending and debts are all time high.

High debt-to-GDP ratio, high unemployment levels, and the continuing struggle to keep up with existing debt repayments are problematic for government worldwide.

World economy growth rate is slowing down due to Corona virus, fall in price of crude oil and trade war between the US and China.

All these indicators validating the upcoming great economic recession and giving warning  that global debt bubble is to be burst soon….

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