Global Credit Bubble – waiting for the pop…

Posted | 03/10/2013 / Views | 1721
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Repeating the quote from yesterday…
"We are in the middle of an epic credit bubble, in my opinion, the likes of which I haven't seen in my career in private equity."
- Joseph Baratta, Global Head of Private Equity at the Blackstone Group

Be it record margin loans on equities, record Government debt all around the world, a quadrillion dollars in derivatives still floating around since the GFC, etc etc it is all part of a credit bubble that could dwarf the GFC when it bursts.  All this debt is in a near zero real interest rate environment.  What happens when interest rates inevitably rise?  Bill Holter in an article posted to our website today puts this current situation in very clear terms.  Australian’s need to realise too that whilst we dodged the last GFC the next will have far wider ramifications and our saviour China is inextricably linked.  So whilst the US debt ceiling will grab all headlines over the next couple of weeks, just remember it is only part of the ever burgeoning global debt crisis that looms.