The WEF(World Economic Forum) Report: Total Global Debt Will Need To Double To Over $200 Trillion By 2020

From Zero Hedge:

A brand new study released by the World Economic Forum (WEF) in collaboration with McKinsey (which is a must read if only for its plethora of charts which we are certain will be used and reused in thousands of posts and articles over the next year), finds that while global credit stock doubled from $57 trillion to $109 trillion in just 10 years (from 2000 to 2010), it will need to double again to an incredible $210 trillion by 2020 in order to provide the necessary credit-driven growth (in a recursive way, whereby credit feeds growth, and growth requires additional credit issuance) for world GDP to retain its current growth rate. And while the goal seeked conclusion is obviously nothing but propaganda for the banking syndicate meant to facilitate the need for endless credit issuance spin (after all how on earth can world GDP growth occur based on something productive like manufacturing when there is only $100 trillion of free cash chasing worthless and rapidly amortizing assets), the study did warn (timidly) that leaders must be wary of new credit "hotspots" of excess lending, as the world emerges from a financial catastrophe blamed in large part "to the failure of the financial system to detect and constrain" these areas of unsustainable debt. In other words: credit doubling blew up the world financial system, but if you promise to behave this time, go ahead and double the world debt again.

Where does the WEF see the bulk of the credit growth coming from? Why Asia of course.

Rapid credit growth is forecast in developing markets, which will add almost US$ 50 trillion to their credit stock by 2020. China’s credit demand will lead global credit growth: it will require US$ 20 trillion more credit in 2020 than in 2009, with 80% of that growth going to the wholesale segment. In developed markets, including the large Western economies, most of the growth will come from the government segment. In North America alone, the value of government bonds is expected to grow by US$ 12 trillion to 2020. Deleveraging in overheated retail and wholesale segments of the developed world will be significant.

$20 trillion more credit in 10 years in China? That may, just may, lead to a slight pick up in food prices...

On the topic of hotspots, or areas where credit growth may be problematic, the WEF basically says that virtually every area that needs to double (or more) its credit in the next decade, could go boom.

Even though some economies will deleverage over the coming decade, the analysis projects a significant number of credit hotspots across the world in 2020 – including retail credit hotspots in countries representing almost half of global GDP. Government credit hotspots are projected for countries representing 13-14% of world GDP – although Western Europe will be more vulnerable. In wholesale credit, Asia and Western Europe will be the main drivers of hotspots in 2020 (Exhibit iv).

http://www.zerohedge.com/article/total-global-debt-has-double-over-200-trillion-2020-preserve-economic-growth