{"id":2455261,"date":"2023-01-13T08:00:59","date_gmt":"2023-01-13T13:00:59","guid":{"rendered":"https:\/\/www.valuewalk.com\/?p=2455261"},"modified":"2023-01-11T16:30:15","modified_gmt":"2023-01-11T21:30:15","slug":"global-debt-leverage-is-a-great-reset-coming","status":"publish","type":"post","link":"https:\/\/www.valuewalk.com\/global-debt-leverage-is-a-great-reset-coming\/","title":{"rendered":"Global Debt Leverage: Is a Great Reset Coming?"},"content":{"rendered":"<p>Ahead of the World Economic Forum, some of today\u2019s turbulent state of affairs are explained by S&amp;P Global economists and analysts. We have identified six interconnected themes &#8211; energy security, <a href=\"https:\/\/www.valuewalk.com\/younger-generations-worried-about-climate-change-are-poised-for-action\/\">climate<\/a> and sustainability, technology and digital disruptions, supply chains, capital markets and geopolitical shocks &#8211; with the greatest potential for large-scale disruption.<\/p>\n\n\t<!-- Begin Mailigen Signup Form -->\n\t<script type=\"text\/javascript\">\n\t\tif (typeof jQuery == 'undefined') {\n\t\t\tdocument.write('<scr' + 'ipt type=\"text\/javascript\" src=\"https:\/\/list.mailigen.com\/js\/jquery.js\"><\/scr' + 'ipt>');\n\t\t}\n\t<\/script>\n\t<script language=\"javascript\" type=\"text\/javascript\" src=\"https:\/\/list.mailigen.com\/js\/scripts.js\"><\/script>\n\t<script language=\"javascript\" type=\"text\/javascript\" src=\"https:\/\/list.mailigen.com\/js\/subscribe2.js\"><\/script>\n\t<div id=\"MG-placeholder\">\n\t<style>.first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important}\n\n\tform.ebook-styles .error,\n\tform.ebook-styles #error {\n\t\tcolor:#d00;\n\t}\n\tform.ebook-styles .formfields h1,\n\tform.ebook-styles .formfields #mg-logo,\n\tform.ebook-styles .formfields #mg-footer {\n\t\tdisplay: none;\n\t}\n\tform.ebook-styles .formfields {\n\t\tfont-size: 12px;\n\t}\n\tform.ebook-styles .formfields p {\n\t\tmargin: 4px 0;\n\t}\n\t<\/style>\n<div style=\"background:#eee;display:block;overflow:hidden;margin-bottom:24px;padding:40px;\">\n<div class=\"two-thirds first\">\n<p style=\"font-size:22px;margin:0 0 10px;\">Get The Full Walter Schloss Series in PDF<\/p>\n\t<p style=\"line-height:1.4;margin-bottom:0;\">Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.<\/p>\n\t<form action=\"https:\/\/valuewalk.us4.list-manage.com\/subscribe\/post?u=c3eb7a1d092fc854772c834e0&amp;id=f6f5bdb8b5\" method=\"post\" id=\"mc-embedded-subscribe-form\" name=\"mc-embedded-subscribe-form\" class=\"validate\" target=\"_blank\" novalidate>\n <div id=\"mc_embed_signup_scroll\">\n \n\t\t\t\t<div class=\"af-element mc-field-group \">\n\t\t\t\t\t<div class=\"af-textWrap c1\"><input type=\"email\" value=\"\" placeholder='Email Address' name=\"EMAIL\" class=\"required af-element email\" id=\"mce-EMAIL\"><\/div>\n\t\t\t\t\t<div class=\"af-clear\"><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"af-element buttonContainer\">\n\t\t\t\t\t<input type=\"submit\" value=\"Subscribe\" name=\"subscribe\" id=\"mc-embedded-subscribe\" class=\"button\">\n\t\t\t\t<\/div>\n \n \n\t<div id=\"mce-responses\" class=\"clear\">\n\t\t<div class=\"response\" id=\"mce-error-response\" style=\"display:none\"><\/div>\n\t\t<div class=\"response\" id=\"mce-success-response\" style=\"display:none\"><\/div>\n\t<\/div>    <!-- real people should not fill this in and expect good things - do not remove this or risk form bot signups-->\n    <div style=\"position: absolute; left: -5000px;\" aria-hidden=\"true\"><input type=\"text\" name=\"b_c3eb7a1d092fc854772c834e0_f6f5bdb8b5\" tabindex=\"-1\" value=\"\"><\/div>\n    \n    <\/div>\n\t<\/form>\n\t<script type='text\/javascript' src='\/\/s3.amazonaws.com\/downloads.mailchimp.com\/js\/mc-validate.js'><\/script><script type='text\/javascript'>(function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true);<\/script>\n<\/div>\n<div class=\"one-third\">\n<img decoding=\"async\" src=\"https:\/\/www.valuewalk.com\/wp-content\/uploads\/2017\/06\/Walter-Schloss_FINAL_JPG.jpg\" alt=\"Walter Schloss eBook\" style=\"width:100%; height:auto\">\n<\/div><\/div><\/div><!-- End Mailigen Signup Form -->\n<p style=\"text-align: center;\"><a href=\"https:\/\/valuewalkpremium.com\/q4-2022-hedge-fund-letters-database-now-live\/\" target=\"_blank\"><em><strong>Q4 2022 hedge fund letters, conferences and more<\/strong><\/em><\/a><\/p>\n<div class=\"ca-widget\" data-token=\"sad9d02c0797\">&nbsp;<\/div>\n<p><script async=\"\" defer=\"\" src=\"https:\/\/secure.money.com\/embeds\/embedder.js?v=1\"><\/script><\/p>\n<p>These insights will help decision-makers like asset managers, asset owners, companies, multilateral institutions, nonprofit organizations and governments look beyond the near term and explore the trends that will shape our future. Below are research insights from <a href=\"https:\/\/www.spglobal.com\/en\/research-insights\/featured\/special-editorial\/look-forward\/look-forward-volume-1-2023\" rel=\"nofollow\" target=\"_blank\">S&amp;P Global Ratings<\/a>.<\/p>\n<h2>Global Debt Leverage: Is a Great Reset Coming?<\/h2>\n<p><strong><em>Terry Chan, CFA, Managing Director &amp; Senior Research Fellow, S&amp;P Global Ratings<br \/>\nAlexandra Dimitrijevic, Global Head of Research &amp; Development, S&amp;P Global Ratings<br \/>\n<\/em><br \/>\n<em>Rising rates and slowing economies mean the world\u2019s high leverage poses a crisis risk<\/em><\/strong><\/p>\n<p>The world\u2019s leverage is at a higher level than pre-global financial crisis (GFC) peaks. Yet demand for debt \u2014 to help consumers with inflation, mitigate climate change and rebuild infrastructure \u2014 will continue. To mitigate the risk of a <a href=\"https:\/\/www.valuewalk.com\/15-years-start-financial-crisis-risks-inflation-runs-rampant\/\">financial crisis<\/a>, trade-offs between spending and saving may be needed.<\/p>\n<ul>\n<li><strong>Record leverage.<\/strong> Global debt has hit a record $300 trillion, or 349% leverage on gross domestic product. This translates to $37,500 of average debt for each person in the world versus GDP per capita of just $12,000. Government debt-to-GDP leverage grew aggressively, by 76%, to a total of 102%, from 2007 to 2022.\n<ul>\n<li>The projected <strong>global debt-to-GDP ratio could reach 366% in 2030<\/strong>, above the 349% reached in June 2022.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Higher interest rates.<\/strong> Debt servicing has become more difficult. Fed funds and European Central Bank rates were up an average of 3 percentage points in 2022. Assuming 35% of debt is floating rate, this means $3 trillion more in interest expenses, or $380 per capita.<\/li>\n<li><strong>Great Reset. <\/strong>There is no easy way to keep global leverage down. Trade-offs include more cautious lending, reduced overspending, restructuring low-performing enterprises and writing down less-productive debt. This will require a \u201cGreat Reset\u201d of policymaker mindset and community acceptance.<\/li>\n<\/ul>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-2455262\" src=\"https:\/\/www.valuewalk.com\/wp-content\/uploads\/2023\/01\/Global-Debt-Leverage.jpg\" alt=\"Global Debt Leverage\" width=\"1061\" height=\"636\" srcset=\"https:\/\/www.valuewalk.com\/wp-content\/uploads\/2023\/01\/Global-Debt-Leverage.jpg 1061w, https:\/\/www.valuewalk.com\/wp-content\/uploads\/2023\/01\/Global-Debt-Leverage-300x180.jpg 300w, https:\/\/www.valuewalk.com\/wp-content\/uploads\/2023\/01\/Global-Debt-Leverage-768x460.jpg 768w, https:\/\/www.valuewalk.com\/wp-content\/uploads\/2023\/01\/Global-Debt-Leverage-696x417.jpg 696w, https:\/\/www.valuewalk.com\/wp-content\/uploads\/2023\/01\/Global-Debt-Leverage-701x420.jpg 701w\" sizes=\"(max-width: 1061px) 100vw, 1061px\" \/><\/p>\n ","protected":false},"excerpt":{"rendered":"<p>Ahead of the World Economic Forum, some of today\u2019s turbulent state of affairs are explained by S&amp;P Global economists and &#8230; <a title=\"Global Debt Leverage: Is a Great Reset Coming?\" class=\"read-more\" href=\"https:\/\/www.valuewalk.com\/global-debt-leverage-is-a-great-reset-coming\/\" aria-label=\"More on Global Debt Leverage: Is a Great Reset Coming?\">Read more<\/a><\/p>\n","protected":false},"author":2476,"featured_media":2454222,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"no","_lmt_disable":"no","_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[6640],"tags":[663789],"states":[],"acf":[],"modified_by":"Umair Tariq","_links":{"self":[{"href":"https:\/\/www.valuewalk.com\/wp-json\/wp\/v2\/posts\/2455261"}],"collection":[{"href":"https:\/\/www.valuewalk.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.valuewalk.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.valuewalk.com\/wp-json\/wp\/v2\/users\/2476"}],"replies":[{"embeddable":true,"href":"https:\/\/www.valuewalk.com\/wp-json\/wp\/v2\/comments?post=2455261"}],"version-history":[{"count":0,"href":"https:\/\/www.valuewalk.com\/wp-json\/wp\/v2\/posts\/2455261\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.valuewalk.com\/wp-json\/wp\/v2\/media\/2454222"}],"wp:attachment":[{"href":"https:\/\/www.valuewalk.com\/wp-json\/wp\/v2\/media?parent=2455261"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.valuewalk.com\/wp-json\/wp\/v2\/categories?post=2455261"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.valuewalk.com\/wp-json\/wp\/v2\/tags?post=2455261"},{"taxonomy":"states","embeddable":true,"href":"https:\/\/www.valuewalk.com\/wp-json\/wp\/v2\/states?post=2455261"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}