You are here
Financial journalists start to notice the worldwide debt bubble
Oil Market Spiral Threatens to Prick Global Debt Bubble, Warns BIS
By Ambrose Evans-Pritchard
The Telegraph, London
Friday, February 5, 2016
The global oil industry is caught in a self-feeding downward spiral as falling prices cause producers to boost output even further in a scramble to service $3 trillion of dollar debt, the world's top watchdog has warned.
The Bank for International Settlements fears that a perverse dynamic is at work where energy companies in Brazil, Russia, China and parts of the US shale belt are increasing production in defiance of normal market logic, leading to a bad "feedback loop" that is sucking the whole sector into a destructive vortex.
... For the remainder of the report:
http://www.nytimes.com/2016/02/04/business/dealbook/toxic-loans-in-china...
... Dispatch continues below ...
Buy precious metals free of value-added tax throughout Europe
Europe Silver Bullion is a fast-growing dealer sourcing its products from renowned mints, refiners, and distributors. Because of a legal loophole that will close soon, you can acquire the world's most popular bullion coins free of value-added tax throughout the European Union. You can collect your order in person at our headquarters in Tallinn, Estonia, or have it delivered in any of the 28 EU countries.
Europe Silver Bullion is owned and operated by North American and European experts in selling, storing, and transporting precious metals. We have an extensive product inventory of silver, gold, platinum, and palladium, and our network spans the world.
Visit us at www.europesilverbullion.com.
"Lower prices have not removed excess capacity from the market, but instead may have exacerbated it. Production has been ramped up, rather than curtailed," said Jaime Caruana, the general manager of the Swiss-based club for central bankers. ...
The nexus of oil and gas debt is just one part of an overstretched financial system, increasingly exposed to the dangers of a "maturing financial cycle" and to punishing moves in the global currency markets.
Mr Caruana said an "illusion of sustainability" has blinded borrowers and debtors, lulling them into a false of security when credit was easy and asset prices were rising. This illusion can die in the blink of an eye. "The turning of the financial cycle can be quite abrupt," he said.
The BIS calculates that debt in US dollars outside the United States has surged to $9.8 trillion, a fivefold rise since 2000 and an unprecedented level for the global monetary system as a whole. ...
... For the remainder of the report:
http://www.telegraph.co.uk/finance/oilprices/12143304/Oil-market-spiral-...
* * *
Toxic Loans Around the World Weigh on Global Growth
By Peter Eavis
The New York Times
Friday, February 5, 2016
Beneath the surface of the global financial system lurks a multi-trillion-dollar problem that could sap the strength of large economies for years to come.
The problem is the giant, stagnant pool of loans that companies and people around the world are struggling to pay back. Bad debts have been a drag on economic activity ever since the financial crisis of 2008, but in recent months, the threat posed by an overhang of bad loans appears to be rising. China is the biggest source of worry. Some analysts estimate that China's troubled credit could exceed $5 trillion, a staggering number that is equivalent to half the size of the country's annual economic output.
Official figures show that Chinese banks pulled back on their lending in December. If such trends persist, China's economy, the second-largest in the world behind the United States', may then slow even more than it has, further harming the many countries that have for years relied on China for their growth.
But it's not just China. Wherever governments and central banks unleashed aggressive stimulus policies in recent years, a toxic debt hangover has followed. In the United States, it took many months for mortgage defaults to fall after the most recent housing bust -- and energy companies are struggling to pay off the cheap money that they borrowed to pile into the shale boom. ...
... For the remainder of the report:
http://www.nytimes.com/2016/02/04/business/dealbook/toxic-loans-in-china...
* * *
Support GATA by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:
http://www.goldrush21.com/order.html
Or by purchasing a colorful GATA T-shirt:
Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:
http://gata.org/node/wallstreetjournal
Help keep GATA going
GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:
To contribute to GATA, please visit:
