Global Economy: Debt Visualized by Highest Country

EDITOR NOTE: The following list shows you the top countries in the global economy whose national debt has exceeded GDP. From a basic hawk perspective, excessive national debt will have to be paid by tax revenue or money printing. This is an unfavorable situation as both constitute a future reduction of wealth by direct or indirect means. If interest rates rise, the government’s interest payment also rises sharply. Higher debt levels can lower the nation’s credit rating, forcing the government to raise debt yields to attract investment. This indirectly affects corporate debt, as companies might also have to raise their yields as well. If businesses are forced into this situation, then product prices will have to be raised, another factor that raises inflation. Right now, the US debt to GDP ratio stands at 143%. Inflation is rising, the dollar is declining, and its world reserve status is under threat. It’s time to protect your assets and your wealth by converting your funds to physical non-CUSIP gold and silver. This is a primarily monetary “fiat” issue, and the only way to hedge against it is to take a good portion of your money out of the fiat system. Otherwise, your dollar will lose value along with your purchasing power. And there are no other assets, besides gold and silver, that can protect you from monetary decline.

As we approach the second half of 2021, many countries around the world are beginning to relax their COVID-19 restrictions.

And while this signals a return to normalcy for much of the global economy, there’s one subject that’s likely to remain controversial: government debt.

To see how each country is faring in the aftermath of an unprecedented global borrowing spree, this graphic from HowMuch.net visualizes debt-to-GDP ratios using April 2021 data from the International Monetary Fund (IMF).

Ranking the Top 10 in Government Debt

Government debt is often analyzed through the debt-to-GDP metric because it contextualizes an otherwise massive number.

Take for example the U.S. national debt, which currently sits at over $27 trillion. In isolation, this figure sounds daunting, but when expressed as a % of U.S. GDP, it works out to a more relatable 133%. This format also allows us to make a better comparison between countries, especially when their economies differ in size.

With that being said, here are the top 10 countries in terms of debt-to-GDP. For further context, we’ve included their 2019 and 2020 values as well.

Source: IMF

Japan tops the list with a ratio of 257%, though this isn’t really a surprise—the country’s debt-to-GDP ratio first surpassed 100% in the 1990s, and in 2010, it became the first advanced economy to reach 200%.

Such significant debt burdens are the result of non-traditional monetary policies, many of which were first implemented by Japan, then adopted by others. In the late 1990s, for instance, the Bank of Japan (BoJ) set interest rates at 0% to counter deflation and promote economic growth.

This low cost of borrowing enables businesses and governments to accumulate debt much more freely and has seen widespread use among other developed nations post-2008.

Original post from TalkMarkets