The U.S. dollar, now at its highest level in 13 months, is being driven higher by the Fed’s interest rate increases and its sell-off of government securities.
“Markets are waking up to the reality that there will be consequences to the rise in interest rates,” said economist Jacob Funk Kirkegaard of the Peterson Institute for International Economics. “It’s part of the transition away from the zero-rate environment we’ve had where money has been really, really cheap.”
Global debt loads have exploded since the Great Recession. From $97 trillion in 2007, total household, corporate and government debt grew to $169 trillion last year, according to the McKinsey Global Institute.
Got huge debt bubbles? When will they go ‘pop’? Watch for an economic down turn as anti inflation higher interest rates take hold. As earnings and profits decline due to slow down, countries and corporations will be unable to repay these huge debts and the bubbles will start popping.