HSBC’s CEO and other prominent leaders in the financial world are issuing dire warnings about the world teetering on the brink of a debt crisis, driven by years of extensive government borrowing. They emphasize the urgent need to address the mounting debt levels. The data presented underscores that we have yet to witness the full repercussions of tighter financial conditions rippling through the global system.
Despite a recent uptick in mortgage rates, overall interest rates for most individuals remain historically low. However, it’s crucial to recognize that we are on the verge of a significant surge in debt costs, with a substantial wave of debt refinancing expected in the next 12 to 24 months, impacting both corporations and sovereign institutions.
The United States, in particular, faces a daunting challenge as it needs to refinance a substantial portion of its debt at substantially higher interest rates in the coming years, while its interest payments are already at an all-time high.
Telegraph: World at ‘tipping point’ following government debt binges, says HSBC boss
“Major economies risk being ‘hit hard’ after allowing post-Covid borrowing to balloon
The world is at a “tipping point” on debt that threatens to spark a global reckoning after years of government borrowing binges, the boss of HSBC has warned.
Noel Quinn, chief executive of the bank, which is one of the world’s biggest, said countries risked being “hit hard” after allowing borrowing to balloon in the wake of the financial crisis and pandemic.
Speaking at the Future Investment Initiative Institute’s summit in Saudi Arabia, known as Davos in the Desert, Mr Quinn said the current rate of borrowing was unsustainable.
He said: “I’m concerned about a tipping point on fiscal deficits. When it comes, it will come fast and I think there are a number of economies in the world where there could be a tipping point and it will hit hard.””
Leaders from some of the world's largest banks are now speaking out against central banks and are sounding alarms about debt levels.
This is how you know things are getting bad.
— Gold Telegraph ⚡ (@GoldTelegraph_) October 25, 2023
This chart serves as a compelling illustration that we have not yet experienced the impact of tighter financial conditions filtering through the system.
Despite the recent increase in mortgage rates, effective interest rates for most individuals remain at historically low… pic.twitter.com/YEEWhBjvZV
— Otavio (Tavi) Costa (@TaviCosta) October 25, 2023
US interest payments on debt are at an all time high, per Reuters. pic.twitter.com/LpnbFitQ84
— unusual_whales (@unusual_whales) October 24, 2023
you think $600BN in one month is bad?
wait till you see what comes next t.co/2XszM8PNcU pic.twitter.com/Gf2pYp5DCk
— zerohedge (@zerohedge) October 25, 2023
Let the Fed print trillions of dollars and have the Treasury give out endless stimmies during COVID and look what happens.
And we wonder why we have an inflation problem in this country🤦♂️🤦♂️ pic.twitter.com/RvlCxw28jg
— QE Infinity (@StealthQE4) October 24, 2023
JP Morgan CEO Jamie Dimon is going after central banks, particularly the Federal Reserve, for being dead wrong about inflation being transitory pic.twitter.com/JDi4jkRQkJ
— Barchart (@Barchart) October 25, 2023
🚨🚨🚨
BREAKING … wars are really expensive. pic.twitter.com/1ZVSPOEFrC
— Wall Street Silver (@WallStreetSilv) October 25, 2023
Deficit Doubling as US Economy Grows Shows Why Yields Are at 5% – Bloomberg
“In a year when the US economy exceeded almost everybody’s expectations, the underlying federal deficit roughly doubled, spotlighting a dire fiscal trajectory likely to only worsen the partisan budget battles in Washington.
The government ran a $2.02 trillion deficit for the fiscal year through September, after adjustments to remove the impact of President Joe Biden’s student-loan forgiveness program, which was scotched by the Supreme Court. The gap is $1.02 trillion more than the prior year.”