In an era when calculations in the trillions are commonplace, a figure that hasn’t yet been heard regularly is “quadrillion,” but that may be about to change. As total global debt continues its inexorable and menacing rise, surpassing $233 trillion in Q3 of 2017, it is projected to hit a quarter of a quadrillion dollars sometime next year. For those not sure what it means, quadrillion is 1 followed by 15 zeros, or one thousand trillion to look at it another way. Whichever way you look at it though, there’s no avoiding the fact that this active debt volcano will eventually explode and cause a financial cataclysm of unprecedented ferocity.

The colossus of record-breaking monetary indebtedness has appeared in every sector of economic activity. From banking systems to governments, from private businesses to households, levels of debt have increased insanely since the financial meltdown of 2008, which itself was brought about, we were told, by excessive debt. What is most troubling is that whereas a decade ago the most reckless borrowers were principally in the United States and on Europe’s periphery, today the contagion has afflicted those previously judicious about credit. One of the worst offenders is Canada, whose households have shattered all illusions of prudence and now have exposure rates that are amongst the highest in the world, in excess of 100% of GDP.

Another country with ballooning debts is Australia. Its national debt is more than 120% of GDP (double what it was twenty years ago and up 15 percentage points from 2007), while more than a fifth of home owners are in some form of mortgage stress, a fact that prompted the IMF to issue a warning last year about the risks of a major squeeze in the event of a recession or another financial crisis.

Chinese debts have become so alarming that the ruling party has taken urgent measures to rein in the potential fallout. China’s banking sector is around three times the size of its economy, and corporate debt alone is currently near 170% of GDP. In March this year, the Bank for International Settlements sounded the alarm on the Chinese and Hong Kong economies and warned that they are at risk of a banking crisis (it also included Canada in that list).

Back in Europe, the UK’s national debt as a percentage of GDP is double what it was when the global crisis hit in 2007. In the private sector, unsecured credit card debts topped ₤70 billion in December 2017, an all-time high. In France public debt is close to 100% of GDP, up from 65% in 2007, while Spain’s is also at parity with GDP whereas it was a mere 35% in 2007. For Germany the increase in public debt has been much less pronounced but it’s the country’s banks which now have excessive exposure, with toxic debts of the shipping sector alone hovering around €100 billion. Deutsche Bank in particular, mired in scandals and facing regular fines for mis-selling and financial chicanery, is looking decidedly shaky (however, its woes and sizeable bad debts don’t seem to have stopped it from paying its staff €2.2 billion in bonuses for 2017).

Meanwhile, looking at the European periphery which had the greatest debt problems in the recent past, the picture is one of stubbornly high non-performing assets. Even though banking systems in Italy, Greece, Cyprus, Ireland, Spain and Portugal have been recapitalised, bad debts have not seen the sharp declines predicted by the European Central Bank. This is especially the case in the first three countries on that list. In Greece for example, non-performing exposures (including off-balance sheet items) reached €100 billion late last year, or around 45% of total bank exposures, with the highest ratios being in consumer credit (53%) and in SMEs (59%). Italy’s perpetually under-performing economy continues to struggle and its fragile banking system, weighed down by €350 billion in bad debts, teeters on the brink.

Out of this global malaise the flow of truly shocking statistics is quite disheartening. Here’s a taste: in America there are now more children living with bankrupt parents than divorced ones; almost half of all Americans will be retiring broke over the next decade (defined as having little to no savings or assets); there are more than 4 million children in the UK living in poverty; the total burden of loans that UK students will be shouldering by the middle of this century will be more than ₤300 billion; more than one in three youngsters in Greece, Spain and Italy are unemployed.

There is one question that’s rarely being asked – is there real economic growth out there that’s strong enough to provide debt repayment capacity? Despite what we are told by central banks, the answer is no. We are now into the 8th (in some cases 9th) year of expansion, but this expansion has been extremely weak and has been fuelled by massive public sector borrowing/spending and increased private sector consumption, also based on borrowing. Very little of the growth that’s been recorded in Europe and North America since 2000 has been driven by fundamental improvements in productivity or increases in productive capacity. And precious little has been invested in upgrading ageing infrastructure or boosting productivity and real wages. Instead, the reckless printing of money and the unprecedented expansion of credit have led to stock market and housing bubbles, both of which are now showing unmistakable signs of bursting.

Even though strong growth just isn’t there, central banks are now raising interest rates across the board, and the reason is two-fold: firstly they realise that quantitative easing and lax monetary policy could not continue for ever and have created dangerous bubbles, and secondly they need the tool of monetary policy when the inevitable recession hits, which they know isn’t far off. In other words, they desperately need to have rates higher so that when growth becomes negative, they have a replenished tool kit to deal with it. But raising rates against the backdrop of record levels of corporate and household debt will not only make the coming recession worse – by pushing the struggling middle and working classes over the edge – but will also provoke housing and stock market crashes, mass insolvencies and a new banking crisis of a magnitude that will be beyond the power of central banks to tackle.

How will current governments that are beholden to large corporations react this time? Will they dare bail out banks with taxpayers’ money again? Will they expand the bail-in experiment that was tried out so ruthlessly and callously on Cypriots in 2013? Will they return to quantitative easing, even though more than $10 trillion have already been added to the balance sheets of the world’s four largest central banks since 2008? Or will they be forced to let banks go under, find a way to compensate deposit holders up to a certain amount (€100,000 in the EU for example) and face the music?

There is no doubt that the failure to deal with the problems of excessive debt and the negligent or criminal behaviour of banks, or to overturn flawed economic models have set the stage for a meltdown even worse than that of a decade ago. The real way out of this mess over the medium to long term (there are no short-term remedies any more) is to fundamentally transform economies, reduce the disproportionate and unchecked powers of corporations over workers, eliminate their control over media, politicians and the levers of political power, restrict the activities that banks are allowed to engage in, and make goods and services that are basic human rights – water, energy, housing, and education – affordable again. These reforms will not come from neo-liberal, capitalistic governments or parties but from people-power channelled through progressive organs of the Left that are willing to implement radical solutions. After all, the malady facing the developed world is of an unprecedented severity and cannot be cured by treating the symptoms rather than the underlying pathology.

Meanwhile, the dangers of economic chaos, civil strife and widespread misery grow ever larger, and the day of reckoning draws nearer. A good indication that top bankers are seriously worried of the inescapable blowback is the fact that Switzerland’s two financial centres, Zurich and Geneva, are in the top five list of European cities for the most cocaine consumption (as measured by the drug’s residual traces in their wastewater). Many of them seem to need hard drugs to dull their fears.