We are coming off the worst week for U.S. markets since August with the Dow and S&P 500 on track for a losing year. Meanwhile, the euro is trading at its lowest against the dollar in seven months. Investors are selling on almost 90 percent certainty the U.S. central bank will raise interest rates next month for the first time in close to 10 years.
But let's keep things in perspective – U.S. markets are more or less only 5 percent away from the records they hit last summer. So by far the most concerning issue I see from the impending hike in U.S. borrowing rates is the debt bubble in emerging economies.
Developing countries have gorged on cheap debt for the past decade, swelling on average to 195 percent of gross domestic product (GDP) on average up from 150 percent in 2009, according to The Economist newspaper. What happens when they have to pay more to continue borrowing?