- World's paper wealth has jumped by $160tn since 2000, primarily due to a rise in global debt and quantitative easing.
- For every dollar of global investment made since 2000, $1.90 of debt has been added.
- Real estate and equity markets have boomed faster than the real economy, raising the putative value of all global assets.
- Asset price inflation has been a key factor behind rising wealth inequality and might be about to change, with interest rates rising.
- A wave of balance sheet restructurings and recessions or inflation staying high and volatile are potential scenarios that could reduce the excess debt.
We should all be worried about the ‘financialisation’ of our world
Rising global debt and quantitative easing have caused the world's paper wealth to jump by $160tn since 2000, but asset price inflation may be about to change. Rising wealth inequality, balance sheet restructurings, and inflation staying high and volatile are potential scenarios for the future.