That's a lot of money...

The suffocation of unsustainable global debt – Total global debt is now over $190 trillion and more than three times global GDP. Contagion with European Union.

Posted by mybudget360

The biggest market in the world is the European Union and debt problems are still rippling through the global markets. It is apparent with the financial crisis that the global markets are tied together by large banks and interconnected trade. A problem in the largest market should be unsettling and the unemployment rate in the European Union is now at a 15 year high. The global debt problem was never really solved but papered over with extensions and banking trickery. The US has dealt with much of the debt issues by suspending major accounting rules and stuffing bad loans into the Federal Reserve like a Christmas stocking. The European Union is facing some challenges ahead and all eyes will be watching given the impact of contagion impacts. Greece was only a tiny sliver of the debt issues compared to the major debt restructuring that will be necessary for a large economy like Spain...

...Total global debt continues to grow

In 2002 total global debt was above $80 trillion. In 2010 that figure more than doubled to over $190 trillion. Looking at the below chart is stunning given that GDP is unlikely to support this amount of global debt:

Today the global debt to GDP ratio is over 300 percent. You will notice that as the crisis hit in 2007 GDP actually fell but total debt kept going up. Even as GDP recovered global debt continued to expand. It is hard to moderate the appetite of central banks seeking to transfer toxic assets from banking associates and removing any opportunity for real price discovery. Much of the price discovery is being shouldered by the citizens of each of these countries. The financial sector especially with the too big to fail has been sheltered at all costs.

Yet peak debt is hitting hard across the global markets even here in the US where our total debt just seems to keep going up and up. We are likely to reach another debt ceiling limit in 2012. We are already seeing that massive amounts of debt have a limit on what they can do for an economy and we are already seeing inflation on the cost of daily goods that Americans buy. Those that don’t bother shopping might say inflation is not bad but the average American with a $25,000 paycheck is feeling the pinch more and more each day.

Read more:
http://www.mybudget360.com/unsustainable-global-debt-total-global-debt-190-trillion-global-debt-gdp-european-union-financial-crisis/