As consumers and investors, we’re currently confronted by a serious problem: debt. Naturally, because of the global economy, the issue is not confined to the United States.
Of course, debt in and of itself is not a bad thing. For example, for a new business, debt can be the fuel for capital investment and expansion. Prudent capital investment can lead to revenue growth and the capacity to repay debt. While interest rates are low, it’s feasible to manage and reduce debt.
It gets challenging when rates begin to rise. Servicing high levels of debt (as we have today) in a rising rate environment will result in sustained, muted economic expansion (i.e., GDP growth). Further, we need to monitor inflation, particularly when rates begin to rise.READ MORE