Expanding the debt bubble to a tipping point – US government debt growing 4 times faster than GDP. Retail investors largely out of stock market.
The global market is being held together with the veneer of massive debt duct tape. The solution for much of the European debt crisis was to simply add more debt to the current situation. Solve a debt problem with more debt in other words. All this does is delay the inevitable. The hope is that somehow GDP in these countries will grow fast enough to pay off existing debts but the amount of debt is so enormous that it is mathematically impossible without inflating currencies away. Even the US is mired in enormous levels of debt and the pace of debt expanding is by far outpacing GDP growth. This is a major concern especially given the slower pace of GDP growth. Massively increasing debt beyond a serviceable level is always an issue especially when the core problem is solvency. Just look at what happened with US households and the recent debt bubble. Just because you have access to debt does not mean you should expand at an unrelenting pace. I wanted to pull some data showing the constraints of massive debt growth.