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How Dangerous Is The World’s Debt Problem?

July 1st, 2017 · No Comments

  • High debt can lead to financial crisis. Since debt levels have risen in many countries, there is considerable reason for concern.
  • However, big financial crises, while economically enormously harmful, are rare events needing outsized asset bubbles financed by debt, we don’t see that in the developed world yet.
  • We have to distinguish between public and private debt, and debt denominated in domestic and foreign currency.
  • We do see two dangerous situations: eurozone peripheral public debt and emerging market private debt denominated in US dollars.

Source: How Dangerous Is The World’s Debt Problem? | Seeking Alpha

Tags: Financial crisis · World Economy