The #1 Paranormal News Site
The Institute of International Finance (IIF) has announced that global debt levels have surged to a record level of $217 trillion in the first quarter of this year. According to representatives to the IIF, this figure represents around 327% of the world’s entire economic output.
The report issued by the Institute states that the increase in global debt was largely driven by the borrowing of the governments of emerging economies which have cumulatively increased borrowing to $56 trillion in the past quarter. Naturally, the governments of these countries have stepped up borrowing in order to invest in various crucial projects to improve the quality of life of their citizens.
Global debt levels increase to record levels
However, this may prove to be counter-productive in the long-term. The history of modern economics has shown that borrowing from international financial institutions such as the World Bank and the International Monetary Fund inevitably results in a country becoming irrevocably saddled with debt.
Even the wealthiest country in the world, the United States of America, has found itself in this position in the past few decades. At this present time, the country is $20 trillion in debt, and there is no sign that this money will be paid off anytime soon. In fact, the sum the country owes is only ever getting larger.
It is estimated that the United States racks up more than $100 million of debt in interest from borrowing every single hour. As governments become trapped in an endless cycle of borrowing and repayment of debts, the onus tends to fall on their citizens to pay for the state’s financial mistakes in the form of increased taxation.
The only people who truly benefit from this state of affairs are the world’s richest people who control the largest banks in the world. As the debt bubble continues to grow, the gulf between these extraordinary wealthy individuals and families and the rest of the world has been steadily widening. According to a report published by the not-for-profit organization Oxfam, eight men living today possess the same amount of wealth as the 3.6 billion people who make up the poorest half of the human race.
According to financial experts such as Bill Gross, the status quo is becoming increasingly unsustainable and that something must be done to break the cycle of borrowing and the accumulation of debt before it is too late. “Our highly levered financial system is like a truckload of nitro glycerin on a bumpy road”. Unfortunately, if the events of the past decade have proven anything, when the largest financial institutions in the world cause crises in the global economy, it is the ordinary people who must face the cost of the fall out while those at the top only become richer as a result.