The authors said the ratio of global debt to GDP was "increasing at an
unabated pace and breaking new highs". They calculated that world debt
levels stood at 212 percent of the global economy, excluding the
financial sector, in 2013-up 38 percent points since 2008.
The
Geneva Report noted that debt accumulation was led by developed
economies until 2008, but has latterly been propelled by developing
economies.
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I don't think a 212% of GDP debt ratio is sustainable. A friend of mine and I were talking about contractors building all sort of buildings in China and running off after getting paid but not putting in things like plumbing or electricity. So, you have buildings that look great but aren't useful to anyone. And the contractors have left town after getting paid. So, this is pretty common over there he was saying. I think possibly a more extreme version of what the U.S. went through in 2007 and 2008 might happen in China. I'm not sure what happens when the Government tries to hide these types of problems like China likely will. It might look different than our Great Recession so it might unravel completely differently. And I'm not sure right now what affect this is going to have on the rest of the world.
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