REPORT: Global debt surges 11% to record $247 trillion in Q1 2018

To recover from the economic collapse a decade ago, governments, households, and corporations went into debt. Central banks facilitated this massive debt increase around the world, from the Federal Reserve to the Bank of Canada (BOC) to the European Central Bank (ECB).

Only recently have the financial experts sounded the alarm about these frightening debt spikes – likely because Donald Trump is president, and pointing out the obvious under his predecessor would have been declared racist.

According to a new report by the Institute of International Finance, global debt rose to a record $247 trillion in the first quarter of 2018, up 11.1 percent from the same period a year ago.

Of the debt levels, here are some interesting findings:

– Household, government, and non-financial corporate debt climbed to $186 trillion.
– Emerging market debt soared to $58.5 trillion.
– Financial sector debt rose to $61 trillion.

The ratio of debt to gross domestic product (GDP) of the G7 and most emerging market countries has surged to 318 percent, the first quarterly ratio jump in more than two years.

With central banks gradually normalizing interest rates, it is going to be more expensive to maintain these debt levels and to borrow more – two things that governments and consumers remain doing.

“With global growth losing some momentum and becoming more divergent, and U.S. rates rising steadily, worries about credit risk are returning to the fore – including in many mature economies,” the IIF said.

When the next recession strikes, it will be the debt bubble that will be the cause.