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The $US200 trillion global debt mountain - how big a threat is it really and what are the implications for investors
28/03/2017

The $US200 trillion global debt mountain - how big a threat is it really and what are the implications for investors

Article by Shane Oliver, Head of Investment Strategy and Chief Economist at Russell Investments.
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The attached note looks at the most commonly expressed concerns about record levels of global debt.

The key points are as follows:  

  • Global debt levels have reached new records both in dollar terms and in relation to GDP.
  • Countries with very high gross debt to GDP include Japan, Belgium, Portugal and Greece. Emerging market debt is relatively low and Australia is towards the low end except in relation to household debt.
  • Global debt is not as a big a concern as headline numbers suggest and debt to income ratios will tend to rise through time simply because of saving & investing.
  • A key sign to watch for would be a broad based rapid rise in debt along with a generalised surge in asset prices. At present this is only evident in pockets globally.

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