The New CS Board

[jumanji0881]

Global debt -
This is an excerpt from Doug Noland at http://creditbubblebulletin.blogspot.com/2022/09/weekly-commentary-super-credit-bubble.html
I’ll refer to data from the IIF’s May Global Debt Monitor: “Total global debt rose by $3.3 trillion in Q1 2022 to a new record of over $305 trillion – mostly due to the U.S. and China.” Comparing Q1 2022 to pre-Covid Q3 2019 (10 quarters), total global debt surged $52.9 TN, or 20.9%. Over this period, emerging market (EM) debt expanded $26.2 TN, or 36.1%, led by a 47% surge in EM government debt and a 32.6% increase in EM non-financial corporate debt.

Additional detail behind the ongoing historic expansion of U.S. and Chinese Super Credit Bubbles:

U.S. Non-Financial Debt (NFD) growth averaged $530 billion during the nineties. This annual average inflated to $1.892 TN for the mortgage finance Bubble period 2000-2007, with a 2004 peak of $2.90 TN. Pandemic year 2020 saw NFD growth spike to $6.752 TN, with last year’s expansion slowing to a still enormous $3.797 TN. NFD then expanded a nominal $1.659 TN during 2022’s first quarter, a blistering 10.2% growth rate. Household Mortgage borrowings expanded at the fastest pace (8.62%) since 2006, while Consumer Credit (non-mortgage) grew at the strongest rate (8.73%) since 2001.

China’s metric for system Credit - Aggregate Financing – expanded $5.1 TN over the past year (through July). While Credit growth slowed slightly from 2020’s historic deluge ($5.2 TN), it still dwarfs 2019’s $3.8 TN and 2018’s $3.3 TN. As a macro analyst of Credit, it is both remarkable and ominous that China confronts such instability even in the face of ongoing massive Credit inflation. Understandably, Beijing is reluctant to push system Credit to only more perilous extremes