Governments around the world may be in for a veritable “doomsday.” According to the Financial Times, the time will come in 2026 and governments around the world will have to refinance more than $33 trillion in debt.
A wall of debt
That wall of debt amounts to an increase in annual refinancing needs of almost 20%, three times the annual capital expenditure of the countries in question.
The looming debt wall will need to be refinanced within a short time frame, likely at higher interest rates, forcing policymakers to pay close attention to how they manage liquidity and maintain financial stability.
As the deadline approaches, countries are already injecting money into the system. Global liquidity has increased by $16.1 trillion over the past 12 months and by $5.9 trillion since June, according to the Financial Times.
The increases come as central banks around the world have started cutting interest rates. The new figures come at a time when the International Monetary Fund is sounding the alarm about rising national debts.
In fact, the IMF states that total global public debt will exceed $100 trillion by the end of 2024, which is approximately 93% of global GDP (income).
What does this mean for Bitcoin?
In principle, a situation seems to arise here in which governments have to pump more and more liquidity into the system in order to survive.
That’s good for Bitcoin, because the digital currency was built for this scenario. Satoshi Nakamoto built Bitcoin as an opportunity to escape the money printing industry within the traditional financial system, in which more and more debt is needed to keep the economy running.
Only real economic growth seems to be able to solve this problem, but the world economy must grow very fast to solve this problem.
In that respect, a future with more inflation is almost a certainty. It is not without reason that central banks aim for inflation of 2% per year. This actually makes it clear that it is better to focus on assets other than government money when it comes to saving.
Temporary promotion: receive €25 free at Bitvavo
To celebrate the price increase, the Dutch crypto exchange Bitvavo is offering an exclusive promotion in collaboration with Newsbit: all new customers temporarily receive €25 free when they create an account via the button below and deposit €20.
Claim your €25 free and create an account with Bitvavo
Don’t miss this opportunity to benefit directly from Bitcoin’s growing popularity!
Source: https://newsbit.nl/financial-times-muur-van-schulden-gaat-overheden-testen-in-2026/
