The global surge in debt has fueled remarkable economic growth, but it raises an urgent question: how long can this debt-driven model sustain itself before reaching a breaking point? The United States now carries a debt-to-GDP ratio exceeding 130%, while Japan faces an even more staggering 180%.
In the U.S., the numbers are particularly concerning. Interest payments on the national debt have already surpassed the entire military budget, and with rising interest rates, the cost of servicing this debt is set to climb even higher, compounding the strain on the economy.
These realities prompt critical questions: How much longer can this escalating debt spiral continue? When will bond investors begin to question the sustainability of this model and prepare for the inevitable reckoning?
In a recent piece published in The Wall Street Journal, I delve into these pressing concerns, exploring the potential tipping points and their broader implications for the global economy.