The Bank of International Settlements in Switzerland reported that worldwide debt now exceeds $100 Trillion. Lets try to put that number in some kind of context.
Total world population is estmated to be about 7.149 billion people. Looking at the demographics we can assume at least 33% of that total (about 2.359 billion) is under age 20. That leaves about 4.79 billion people old enough to reasonably be able to have some kind of income. Of those people we can assume that at best 1 out 2 are actually wage earners (this is probably generous on a worldwide basis). That works out to over $41,000 in debt for every potential wage earner. That is a huge debt load even for people in developed countries like the US. But in most countries where average wages are lower, it is a gigantic amount of debt.
Another way to look at it. Total world GDP is estimated at $71 Trillion so total debt would now be over 140% of total world GDP. Let that sink in. Total world debt exceeds the combined net worth of everything on the planet by over 140% (at current relatively low interest rates on much of that debt). The US has its fair share of this debt along with unfunded future debt obligations it doesn't even account for yet until they come due.
So is it any wonder that everyone should be concerned as to whether all this debt is sustainable. How much of it is bad debt just not yet written off? What if interest rates on all this debt go up?
A major default on any of this debt anywhere in the world now can start a chain reaction. This is one of the big reasons why we have to keep an eye on things here.
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