World Debt Bubble

U.S. 329% debt-to-GDP. 

Eurozone 446% debt-to-GDP

China 256% debt-to-GDP (if numbers/estimates trustworthy)

Federal debt, state debt, and city debt [unfunded liabilities included] exceeds $200 trillion. China has similar issues with local & providence governments.

Not included above is corporate debt, which has been increasing. Stock buybacks and financial engineering are not good investments for corporations as the effect is temporary. Debt is better reserved for growing income.

Rising interest rates may trigger next recession. “With the Fed paring back its balance sheet and the federal government increasing its borrowing, the U.S. will have to finance by the end of the year “$400 billion a quarter — that’s a lot, that’s a huge shift from the past.” - Jamie Dimon, JP Morgan Chase

Recent debt-to-GDP data from Ned David Research (NDR):

Japan 590%
France 480%
Germany 279%
Greece 360%
S. Korea 357%
Netherlands 725%
Denmark 585%
Canada 332%
Italy 360%
Portugal 488%
Ireland 828%
Spain 397%
Sweden 467%
Switzerland 382%
UK 476%

When bubbles pop recessions happen. Stocks could fall 50% again. Bonds fall in this scenario as rising interest rates adversely affect bond values. 

No hint any economies are falling apart yet. These scenarios are early observations what may come over the next few years or decade. No one really knows what will happen. But with debt and interest rates growing, the next recession will be painful. 

My thoughts are to have diverse holdings, reduce your debt, and raise cash for the next downturn. There are opportunities in recessions. Diverse holdings could include low cost Vanguard Total World Stocks and Total World Bond ETFs. Other options include precious metals, CDs, US savings bonds, and savings accounts with online banks.

Working on my health, and planning working into my 70s or 80s. Based on family history and improving health care, could be healthy into 90s or 100s. Like to raise more savings.

Credit ‘On My Radar’ by Steve Blumenthal for information & inspiration. Suggest you read:

https://www.cmgwealth.com/ri-category/on-my-radar/