The graph is mis-labeled (always read the fine print). It should read “Debt SERVICE to income” which is, in fact, near record lows. Household Debt-to-GDP is at 80%, which is below the 2008 record of 96% but well above the historical average of ~50%.
Obviously, the reason the HH debt SERVICE ratio is low is because many folks locked into low-rate fixed-rate mortgages. Inflated housing prices aside, that’s a good thing for the borrowers; obviously bad for the lenders. Rates on all of the variable rate debt, however – of which there is a fair amount – are moving up as I type.
There’s over $300 trillion of debt repricing over the next 5 years globally. Absent some miracle, most of the interest rates on that debt will be doubling. These are big numbers.
