Global debt climbed new highs in 2020 as developed countries borrowed at a record pace to, basically, send out free money to their citizens - Chart 1. The ratio was up an eye-popping 50% from 294% to 343% - a new all time record, of course. Total debt stood at $281 trillion at the end of 2020. Given the continued fiscal and monetary largesse from the Biden administration ($1.9 trillion already done and another $3 trillion announced) and the economic trouble in the EU, debt/GDP will almost certainly go even higher this year.
Combine massive debt, zero/negative interest rates, a financial bubble, loony toon spending on crazy stuff (eg NFTs and cryptos) and looming inflation and... what do we get?
Honestly, no one really knows - this situation is unprecedented in history. We can't really find anything to "rhyme" with what is happening today.
So, when in doubt, get the hell (!) out. Given the unknown-unknowns, this is my best prediction:
- There's a Black Swan coming. No - not even that, because we know that black swans actually exist. I'm not going to put it down in pixels, just let your imagination run rampant to come up with an appropriate simile. Matrix, anyone? Blue pill or red pill? (Big Smile).
C'mon, this could be fun: imagine the wildest, most out-of-the-box outcome over the next few years and let it rip in the Comments section.