JPMorgan: Why record debt will boost global stocks and bonds - Business Insider

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JPMorgan breaks down why a record-setting debt surge will boost both stocks and bonds worldwide

Two crossed lines that form an 'X'. It indicates a way to close an interaction, or dismiss a notification.JPMorgan forecast that global debt will increase by $16 trillion this year, pushing combined public and private sector debt to a record $200 trillion.

"Elevated cash holdings create a strong background support for non-cash assets such as bonds and equities," the strategists wrote. "We believe that most of this liquidity will eventually be deployed into equities as the need for precautionary savings subsides over time."A surge in global debt to record levels will likely lead to loose monetary policy worldwide, boosting liquidity and supporting equity and bond prices, according to JPMorgan.

The increase in global indebtedness would likely boost private-sector savings, which would "keep economic growth and inflation low and make it even more difficult for debt levels to decline vs. incomes in the future," said JPMorgan.

 

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Until they start taking about a debt deflation bubble. 🙃🙃

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