News

World Bank Warns of Massive Debt Wave

The runaway debt in our global financial system is unsustainable.

Indeed, the World Bank's president just issued a warning.

Read this excerpt from a Dec. 19 France 24 article:

A wave of debt in emerging and developing nations has grown faster and larger than in any period of the last five decades and could end with another crisis, the World Bank warned Thursday.

And if the wave breaks, it could be more damaging since it would engulf private companies in addition to governments, at a time when economic growth is sluggish, according to a new report that covers four debt surges from 1970-2018.

"The size, speed and breadth of the latest debt wave should concern us all," World Bank President David Malpass said in a statement.

"Clearly, it's time for course corrections," he added.

The World Bank and International Monetary Fund have been sounding the warning about growing global debt for years, but the latest report is even more stark and turned up the volume on its calls for governments to take steps to prevent a debt crisis.

IMF chief Kristalina Georgieva on Thursday said developing nations in Africa especially need to strike the right balance between financing development and a manageable debt level.

The IMF reported that total global debt rose to $188 trillion at the end of 2018, equivalent to nearly 230 percent of the world's economy.

The August 2019 Elliott Wave Theorist discussed federal debt in the U.S.:

Having a huge debt is dangerous, but it can be manageable as long as interest rates are low. When rates rise, however, the debt quickly becomes unsustainable. Annual interest payments on the U.S. federal debt cost Washington just over $300 billion in 2013. Fast forward to today, and that cost has almost doubled. Just think about that for a minute. Nearly $600 billion U.S. dollars a year just to pay interest. That annual payment is larger than the entire annual Gross Domestic Product of such developed trading nations as Taiwan, Sweden, Poland, Belgium and Thailand.

Elliott Wave International's analysts expect a historic debt deflation ahead.

Read the free report, "What You Need to Know Now About Protecting Yourself from Deflation."

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