The threat of a looming crisis is not solely down to the absolute volume of debts. At least three things make the situation especially precarious.
First, debt — particularly dollar denominated — is becoming more expensive as market expectations are pricing at least three rate hikes by the US Fed this year, and a relatively strong dollar is putting pressure on borrowers to service foreign currency obligations. The recent downgrades of South Africa to junk status follow a year in which credit rating agencies cut EM borrowers' grades in record numbers. Moody's downgraded 24 sovereigns (including Brazil, Nigeria and Saudi Arabia) in the first half of 2016, adding to concerns as to whether borrowers will be able to service their obligations.
Second, the ability to repay debt is under strain in countries whose revenues stem disproportionately from commodities, whose prices have suffered. Furthermore, nations exposed to significant Chinese trade and investment face fiscal stress as China itself has a relatively soft economic outlook.
Finally, the prevailing mixed global economic growth picture — underscored by the forecasts in the recent IMF World Economic Outlook — prompts questions as to how (and indeed whether) outstanding debts will be paid or brought under control.
http://www.zerohedge.com/news/2017-05-30/precarious-debt-crisis-could-reverberate-around-world
probably the best author on this topic is Steve Keen
https://www.amazon.com/Another-Financial-Crisis-Future-Capitalism-ebook/dp/B071HNZT49/
Richard Duncan also offers an insightful periodic video series named Macro Watch which tracks the evolution of creditism (which has remained mislabeled as capitalism in spite of the shift to a fiat fractional reserve debt ponzi economic system where credit rather than money supply drives just about everything)
https://www.richardduncaneconomics.com
My new phrase:
fiat fractional reserve debt ponzi 8)
Quote from: Mackin USA on May 31, 2017, 03:42:55 PM
My new phrase:
fiat fractional reserve debt ponzi 8)
That is so good.
https://www.bloomberg.com/news/articles/2017-06-01/illinois-bonds-cut-to-one-step-above-junk-by-s-p-over-stalemate
Just the beginning
Connecticut's Tax Comeuppance
https://www.wsj.com/articles/connecticuts-tax-comeuppance-1496443958
The Aetna insurance company has been based in Hartford, Conn., since 1853, but this week it said it is looking to move to another state. Governor Dannel Malloy has pledged to match other states' financial incentives, but taxpayer money can't buy fiscal certainty and a less destructive business climate. That's the real problem in Connecticut, which saw GE vamoose to Boston last year and which even Mr. Malloy now seems to recognize.
and debt continues to rise
Great News: There's a Recession Coming
https://www.mrmoneymustache.com/2017/06/20/next-recession/
and from the UK they say
http://www.independent.co.uk/news/business/news/global-financial-crash-central-bankers-warn-back-with-a-vengeance-china-debt-gdp-ratio-a7807811.html