Alas, in a world in which there is no longer even hope for growth
without massive debt expansion, there is a cost to keeping global
equities stable (and US stocks at record highs): that cost is $30
trillion, or nearly double the GDP of the United States, which is by how
much global debt has risen over the same period. Specifically, total
global debt has exploded by 40% in just 6 short years from 2007 to
2013, from "only" $70 trillion to over $100 trillion as of mid-2013
, according to the BIS' just-released quarterly review.
It should come as no surprise to anyone by now, but the only reason
why global stocks haven't plummeted since the Lehman collapse is simple:
governments have become the final backstop for onboarding risk, with a
Central Bank stamp of approval - in other words, the very framework of
the fiat system is at stake should global equity levels collapse. The
BIS admits as much: “Given the significant expansion in
government spending in recent years, governments (including central,
state and local governments) have been the largest debt issuers,” according to Branimir Gruic, an analyst, and Andreas Schrimpf, an economist at the BIS.