Although the PMI report is encouraging, there’s still reason to remain somewhat cautious long-term. The latest accounting of global debt levels was just released, and the news might be so bad that it’s good—for gold prices, at least.
After climbing above $250 trillion in the first half of 2019, the amount of debt that’s owed by governments, the financial sector and non-financial sector is now forecast to touch a record $255 trillion by year’s end, according to the Washington, D.C.-based Institute of International Finance (IIF).
Says IIF economists, this mind-boggling sum is the equivalent of 320 percent of total global economic activity—the highest level ever.
To put it another way, for every $1 that’s produced today, an additional $3.20 in debt is created and thrown atop the heap. I shouldn’t need to say it, but I will anyway: This is unsustainable.