The World Economic Forum reports that:
Credit levels will need to double over the next 10 years, growing by US$ 103 trillion, to support consensus-projected economic growth. “This doubling of credit could be achieved without increasing the risk of major crisis, finds “More Credit with Fewer Crises: Responsibly Meeting the World’s Growing Demand for Credit,” a report released by the World Economic Forum in collaboration with McKinsey & Company. The study develops a detailed global credit model using historical credit volumes and forecasting potential credit demand to 2020 across 79 countries, representing 99% of world credit volume. The study applies a sustainability methodology to the projected credit demand, using newly developed metrics to answer the following two questions: Will credit growth be sufficient to meet demand? Is there a risk of future credit crises and, if so, where?”
That is, we have to hand out $10+ trillion dollars every year until 2020 in order to sustain global economic growth. United States GDP is around $14 trillion dollars, so we’d be creating more than half a United States each year in available credit. Better get those printing presses warmed up!
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