Animated: Global Debt Projections (2005-2027P) 💳️t.co/8XFqKNQowE pic.twitter.com/v4lUyCxnDE
— Visual Capitalist (@VisualCap) August 1, 2023
In 1971, global debt was a “mere” $4 trillion.
In 2023 global debt is $325T excluding derivatives. How much longer can this debt bubble go? 🚨 pic.twitter.com/jJbSMdWH7h
— Wall Street Silver (@WallStreetSilv) August 2, 2023
The core of global debt is now unstable. pic.twitter.com/dvbf5D3svT
— Kathleen Tyson (@Kathleen_Tyson_) July 31, 2023
The Runaway Debt Train Is Leaving the Station
The U.S. Treasury is increasing its quarterly sales of long-term debt for the first time in over two years due to rising borrowing needs. This has contributed to Fitch Ratings downgrading the U.S. credit rating from AAA to AA+. The debt surge, part of the Biden administration’s deficit-focused policy, may lead to the U.S. hitting $1+ trillion in interest payments soon. Analysts predict this could lead to higher yields and potentially require another round of quantitative easing from the Federal Reserve.
Fitch Downgraded Its U.S. Credit Rating Over Fiscal Deterioration & Government’s Growing Debt Burden
Fitch has downgraded the US credit rating from AAA to AA+, citing deteriorating governance standards and rising debt, which sent global stock markets tumbling. This follows precarious US debt ceiling negotiations risking the nation’s first default. Fitch predicts a significant rise in the US deficit by 2023. Despite this, Goldman Sachs analysts argue that no significant forced selling of Treasury securities is expected, mirroring events after the 2011 S&P downgrade. However, the impact on market sentiment is notably negative.
2005-2027: A look at Global Debt Projections
Global debt is alarmingly high at nearly $305 trillion as of Q1 2023, and expected to grow, causing concern for government leverage amidst rising interest rates and slowing growth. Projections suggest U.S. public debt-to-GDP will reach a record 134% by 2027, raising net debt servicing costs, with the next decade’s interest costs on U.S. debt projected at $10.6 trillion. Similarly, China’s debt is surging rapidly, predicted to exceed 100% by 2026, with new government debt issuance reaching record levels this year, largely from infrastructure bonds.