(12-4-12) The Global Debt Time Bomb is now 5 minutes to midnight. We have been consistently writing on the necessity for governments to adopt a Global Grey Skies Policy, meaning that global GDP of 1.5% per annum can be maintained through the application of negative interest rates and endless liquidity.

This should be done while they still have the ability to do so. To that end we are continuing to see a pickup in this global pernicious cycle of credit quality deterioration since we see that the pace of this deterioration at both the governmental and corporate level is increasing globally.

For instance in the previous three years, we have seen this credit quality deterioration since there has been a record number of credit downgrades by the credit rating agencies of governments and corporations across the planet.

Indeed we now see the lowest median credit quality both at a governmental and corporate level that we have not seen since 1933 in the very trough of the Great Depression.