Spiralling debt is pouring fuel on investor anxieties

Roger Montgomery

These days, it’s not easy for investors to feel relaxed and comfortable. Pouring more fuel on investor anxieties is a report by the Bank of International Settlement that shows global debt spiralling out of control. Based on their recently released survey, the Bank of International Settlement’s chief economist, Claudio Borio, said there were ample reasons to worry about the health of the world’s financial system. Zero interest rates and bond purchases by central banks have left markets acutely sensitive to the slightest shift in monetary policy, or even a hint of a shift. The historical anomaly of negative interest rates being offered for so much sovereign debt, and now spreading to corporate debt, is underpinning highly valued stock markets at a time when profit growth is more difficult to come by. Of significance, China’s total credit to GDP hit 255 per cent at the end of the March 2016 Quarter, up 70 per cent in five years, the biggest jump of any country in the survey. Read the full article here: (VIEW LINK)


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