The Missing Debt is the Crisis

A growing theme in recent years is the rise in debt and the risk it poses.

ZH: Nomi Prins: 10 Years Later, A Debt Crisis Is Building Again
That’s because the last financial crisis was about debt and debt levels have increased substantially since 2008. The entire “recovery” was built on debt.

From 179% before the financial crisis, the global debt-to-GDP ratio has jumped to 217% today. Companies and governments have piled on more debt than before. Emerging-market debt, led by China, is also at a record. The big banks are even bigger, and remain “too big to fail.”

...Now, ten years after the financial crisis, there are major complications building with the deluge of debt created on the back of quantitative easing policy.

When the next shoe drops from our inflated bubble markets, it will be the debt markets that lead the way. Whether the financial bubble begins to pop in emerging markets, over-leveraged corporate sectors or from over-stretched consumers — the reality is that a storm is brewing.

All of this is a recipe for another crisis.
There are sharp increases in subcategories such as student loan debt, but overall the domestic U.S. credit market is stuck what we would call a recession before 2008. The post-2008 depression is the result of slower than "normal" credit growth.
The next crisis won't be caused by U.S. debt levels and it won't be caused by there being too much U.S. debt creation post-2008. It might be that the entire post-2008 period is an intermission in this Great Depression, an extended intermission purchased by central banks. Many of the gains from increased central bank balance sheets will evaporate when the stock market declines and/or interest rates rise. Maybe the debt increase since 2008 was particularly inefficient. However, the absolute increase in domestic U.S. debt post-2008 is not a crisis in and of itself.

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