The International Monetary Fund (IMF), a global financial institution and a specialized agency of the United Nations, has warned the world that the debt is reaching unsustainable levels. This is a “sobering reality,” but not too much of a surprise considering the globe’s financial system is built on debt.
Kristalina Georgieva, the IMF chief, warned on Wednesday that global public debt will exceed the size of the world economy within five years, calling the trend a “sobering reality” for policymakers worldwide.
The United States is also facing a harsh reality as it approaches $38 trillion in debt. Washington is running persistent deficits despite high interest rates. As of October, it has hit a record $37 trillion, around 125% of GDP, with interest payments now one of the largest federal expenses, exceeding defense spending.
Investors Bail On The U.S. Dollar As Debt Approaches $38 Trillion
“Global public debt is projected to exceed 100% of GDP by 2029,” Georgieva said in a speech broadcast on the IMF’s official YouTube channel. She warned that rising debt risks would inflate interest costs, push up rates, limit spending, and weaken the global governments’ ability to absorb shocks.
This debt refers to all debt held by governments, businesses, and individuals.
Economic uncertainty has now become normal, Gerogieva claimed, according to a report by RT. “Global resilience has not yet been fully tested. And there are worrying signs the test may come,” Georgieva said, pointing to mounting warning signs – including a surge in gold prices, which hit a record $4,000 per ounce on Wednesday, and soaring valuations for US stocks, reminiscent of the dotcom bubble 25 years ago. Georgieva also warned about the impact of Trump’s tariffs, saying their “full effect is still to unfold.”
She also said that the economy worldwide is doing “worse than we need.”
The era of central banking has not been a prosperous one for those who are not members of some kind of ruling class. There is no way to pay back that amount of debt. Something will have to give at some point. What will it be? The Great Reset?
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