World debt is about to burst through the US$100trn barrier for the first time in history.
The chart above, compiled by M&G Investments, shows the meteoric rise in world debt between June 1999 and December 2013, tracking the increase in credit issued to non-finanical firms, households and governments. It reveals the world has added another $20trn debt to its balance sheet since June 2009 alone.
In an attempt to visualise the enormity of just 1% ($1trn) of this outstanding debt, M&G came up with the following facts:
• $1trn of dollar bills placed end-to-end would reach the sun (96 million miles);
• $1trn of dollar bills is the same height as 85 billion people standing on each other’s heads;
• If you could count three bills per second, it would take one person 124 lifetimes to count out $1trn,
counting non-stop from birth to age 85.
“It is simply astonishing that the world has added another $20trn in debt since June 2009, a time when the global economy was recovering from a devastating financial crisis which was caused in-part by excessive leverage,” says Anthony Doyle, investment director within M&G’s fixed interest team. “Unfortunately, the financial system seems to be addicted to debt. Central banks have facilitated this addiction through quantitative easing and ultra-low monetary policy, forcing savers into riskier investments in the hope of generating a positive real return.”
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