Developed World Resembles Emerging Markets With Debt Spiral
For decades, economists looked down on emerging markets whenever they ran chronic deficits, accumulated too much debt, and watched interest expense consume an increasing portion of government revenue. The developed world supposedly knew better. Now the Institute of International Finance is warning t
Source: Armstrong Economics
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DW NOTE
The developed world now carries interest-to-revenue ratios that would have triggered IMF intervention in any emerging market a decade ago. The difference is that rich countries still control the currency in which their debts are denominated — which means they can delay the reckoning, not avoid it. The US federal deficit is running at $1.9 trillion annually while the Fed raises rates into a fiscal structure that cannot afford them.