Global debt has reached record heights without any signs of relief. While central bankers try to explain away the phenomenon of these out-of-control numbers, it’s not much of a mystery. Immediate consumption with the promise of repayment sometime in the future has consequences.
Global debt is staggering to the point most of it will never be repaid. Certainly not in our generation. Perhaps by our grandchildren, but as global debt keeps mounting, the picture is doubtful.
Prior to 2007, globalization, the exchange of goods and services between countries, was at its highest level. Since then, globalization has leveled off. We may have seen the peak of globalization.
Emerging countries, benefiting from globalization, have raised their standard of living and cheap goods are no longer crossing borders with the same abandon. Countries are instituting nationalistic protectionist measures to protect their own economy.
Globalization is giving way to “islandization,” where the movement of capital and good across borders is being limited instead of expanded. This limited global trading, along with rising geopolitical tensions, will negatively affect global economic expansion, while the global debt is still spiraling out of control.