Leverage for the Future

The bottom pane in the attached picture shows the leverage (Total Debt/Total Equity) for S&P500, Shanghai Composite and Nifty (India) over time. While the  companies in US (green line) appear to have been de-leveraging since 2007-08, Indian companies (white line) have come out of the slump borrowing more and China (yellow line) looks highly leveraged to me. Can we expect Chinese companies to keep on this course even after the rampant inflation and subsequent rate hikes? Between India and China, GDP and trade numbers could support big debt for China but when talking of US I feel the return on equity for investors stands a better chance of appreciating just from the “room” for leverage perspective. Now the US firms not willing to do it right now in spite of all the help from Fed is another matter.

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