It is difficult to comprehend that only now is the IMF belatedly issuing warnings about debt in South East Asia, the Pacific and elsewhere besides.

The proverbial writing has been on the wall for literally years that the world's mountainous debt was, in reality, a 'debt bomb' waiting to go off.

It does not take a PhD in Economics or History to understand that interest rates approaching zero were unsustainable over the longer term and, in fact, downright dangerous if, as was inevitably the case, debtors were encouraged to believe that acquiring even more debt was a good idea.

Just how many countries, corporations and individuals have obeyed the siren call of the world's finance and banking systems to acquire more debt than they can sensibly ever hope to repay must now be weighing heavily on the minds of those who purport to 'manage' the neo-liberal capitalist system.

The truth is that no-one has the first clue about the answer to this question.

There is some speculation in the USA that 10%, perhaps more, of the companies listed on the New York Stock Exchange are 'zombie companies', meaning corporations completely reliant upon turning over ever higher levels of debt to pay a return on investment to their stock holders.

Some companies that have never turned a profit have market valuations in the scores of billions. They are, to put it bluntly, wildly over valued at best if not actually worthless at worst.

In what is reputedly soon to be the world's largest economy, the Chinese government is working hard to disguise the true extent of the country's economic woes.

It has always been deliberately opaque about the condition of its economy, both for internal and external political purposes, but China's internal debt levels are thought to far exceed 300% of gross domestic product.

To the extent that China's problems are public knowledge, what is clearly known is that its gigantic property sector is already in dire straits, with a number of its largest corporations having defaulted on their external and internal debts.

So far at least the fall out from this has been disguised by shifting responsibility for managing the consequences onto China's already beleaguered Local Government system.

As for foreign investors, they have simply been left to 'take a hair cut', meaning that they will never recover their investments.

Not surprisingly, the flow of western capital into China has effectively dried up. No-one knows what the long term implications are from the withdrawal of western capital from China but it seems unlikely to be good.

In a somewhat similar way, the flight of western capital from Russia has been pronounced since the start of the war in the Ukraine. Europe is in the throes of abandoning energy purchases from Russia albeit at the cost for great deal of economic and other pain.

The longer term impact of all this seems likely to force Russia to become very dependant upon China for earning foreign currency by, for example, the sale of energy.

This is the context within which the problems confronting PNG must be understood. It seems destined to be presented with a series of very unpleasant debt refinancing decisions over the next several years. The budget impact could be severe and this will almost certainly put further pressure on its already grossly inadequate and misallocated budget.

None of this bodes well for ordinary Papua New Guineans.

The world's most successful investor, Warren Buffet, once said “It’s only when the tide goes out that you learn who’s been swimming naked.”

I think that we will very soon be discovering just how accurate Buffet may have been.