Economists like Nouriel Roubini are starting to fret about a US debt crisis as interest rates rise – here’s why it’s the latest issue rattling markets

George Glover 

• Economists are starting to worry about the sustainability of high levels of debt as global interest rates rise sharply.
• A credit crunch could fuel “the mother of all economic crises,” Nouriel Roubini warned last week.
• Some experts have compared the current situation to the structural issues that triggered the 2008 financial crash.

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As global interest rates rise at a staggering pace, economists are starting to worry about the mountain of debt built up over the years when borrowing costs languished near zero.

Nouriel Roubini raised the alarm last week, warning that the steep rise in rates could erode the ability of households and companies to meet their loan repayment commitments. He said that could trigger “the mother of all economic crises“.

Roubini echoed organizations like the International Monetary Fund and the World Bank, whose chiefs have warned that the rising debt burden puts the global economy at risk of slipping into a severe recession.

Concerns have grown as to whether the high levels of debt in the US economy are sustainable, after the Federal Reserve boosted its benchmark rate to 4%, from a range between zero and 0.25%  as recently as March. Other central banks across the world also have lifted rates sharply to combat soaring prices………More here

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