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The Curious Case Of High Debt And Low Interest Rates

On one hand the world is swarming in debt, on the other hand the interest rates are now at its lowest ever. Why are loan takers being incentivised for going into debt?

“May you live in interesting times” goes an old Chinese curse and the current state of world economy could be a reality of that curse. On one hand the world is swarming in debt, almost touching the $300 trillion mark (see Graph 1), on the other hand the interest rates are now at its lowest ever, in the entire economic history of civilization. If this situation did not sound bizarre, top it up with an economic conundrum, a negative yield on bonds.