Global debt just hit $345.7 trillion. That’s ~3x the size of the world’s GDP

 Global debt just hit $345.7 trillion. That’s ~3x the size of the world’s GDP...

This isn’t just a statistic.

It’s a stress test for the global financial system.

Your government is lying about how safe your money is. 

Here’s what’s really going on :

1) Debt didn’t rise overnight. It was engineered.

Post-COVID stimulus programs

Cheap money era (near-zero interest rates for years)

Governments choosing growth today over sustainability tomorrow

Result?

Debt ballooned across governments, households, and corporations.

2) The problem is not debt. The problem is cost of debt.

When rates were at 0–1%, debt felt harmless.

Today:

US policy rates hover around 3%+

Many emerging markets borrow at 5–8%

Refinancing costs have doubled or tripled in some cases

This means:

Old debt is coming back at much higher interest.

That’s where cracks appear.

3) Governments are the biggest risk this time.

US federal debt: $34+ trillion

Japan: ~260% debt-to-GDP

Several European nations running persistent fiscal deficits

When governments borrow too much:

They lose flexibility during crises

They print or inflate their way out

Citizens pay via higher taxes or lower purchasing power

History is very clear on this.

4) Emerging markets are walking a tightrope.

Many EM countries:

Borrow in USD

Earn in local currency

When the dollar strengthens:

Debt becomes more expensive

Capital flows reverse

Currency crises follow

We’ve seen this movie before (Latin America, Asia, Turkey, Sri Lanka).

5) The most under-discussed risk: policy paralysis.

High debt limits options.

In the next global shock:

Governments can’t stimulate freely

Central banks can’t cut aggressively

Bailouts become politically toxic

That’s dangerous.

So what does this mean for individuals?

A few uncomfortable truths:

Inflation is no longer “temporary”

Financial repression (low real returns) is likely

Asset prices will stay volatile

Cash is not as safe as it feels

And the most important lesson:

In a world drowning in debt, personal balance sheets matter more than ever.

The next decade won’t reward blind optimism.

It will reward prudence, diversification, and patience.

Debt-fueled growth always ends the same way.

The only question is when.

What do you think breaks first governments, markets, or currencies?

Hope you like this

keep Reading & upgrading your knowledge 

Wise investing 

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Hemant pagi