Debt Bomb

The ticking global debt bomb is in the in the spotlight again.

Or, at least, it should be.

Greece's woes draw attention to the looming financing problems of other countries with a lot of debt. The strain of funding these requirements - the global debt bomb - is the greatest threat to global growth prospects. This is why central banks have flooded the financial system with money. It's the biggest and most critical financial battle of our time.

The Bank for International Settlements - essentially the central bank of the central bankers - said as much in a recent research paper, noting that governments around the world are overspending in an effort to make up for the lack of activity from cash-strapped consumers and companies. To maintain those high spending levels at a time when tax-receipts are down, however, governments have no choice but to borrow - a strategy that they cannot follow forever, BIS researchers said.

"Our projections of public debt ratios lead us to conclude that the path pursued by fiscal authorities in a number of industrial countries is unsustainable," the researchers said. "Drastic measures are necessary to check the rapid growth of current and future liabilities of governments and reduce their adverse consequences for long-term growth and monetary stability."