UNDERDEVELOPED DEBT JUNKIES

Last week, the IMF reported that almost half of the less advanced economies in the developing world, with a record high $38 billion in market debt and at risk for falling into debt distress.

Mozambique, the Republic of Congo, and Zimbabwe are among the list of nine countries in debt distress. An additional 24 countries are expected to follow suit, the highest by far since 2010, since records were first kept.

TREND FORECAST: While we forecast that the U.S. Federal Reserve will continue to lower interest rates to negative/zero by this time next year, considering the weakness of other major economies, the U.S. dollar will remain and/or strengthen.

Therefore, the stronger the dollar gets and the weaker other currencies, the weight of nations’ dollar-denominated debt load will grow heavier, pushing their economies deeper into recession/depression.