Miscellaneous
The global debt pile now exceeds $300tn - three times GDP - that burdens the world. The problem is that debt ultimately has to be repaid or, more likely, rolled over. The modern financial cycle gyrates with the tempo of debt maturities. A renewed dose of QE, or a ‘Powell Put’, seems the inevitable remedy for the next stock market sell-off. Future growth of global liquidity has seemingly become institutionalized by these debt burdens. Unless the spiral is broken by higher interest rates, global liquidity will ultimately be bound higher. Asset allocation has been put on a potentially self-destructive autopilot that ignores sensible investment criteria.