The cost of borrowing has climb to its highest level since 2008, forcing many developing nations throughout the globe to scale back or cancel billions of dollars of bond sales. This comes at a time that spending requirements have increased at the time of tepid economic growth.

According to Romania's Finance Ministry had rejected that all its bids for its its seven year bond sale had been rejected yesterday due to increasing market volatility. South Korea on the other hand, it had was only able to raise an amount below 10% of the planned amount during its auction of inflation-linked bonds. Even Russia was forced to scrap a 15 year ruble denominated bond sale last June 19, its second such cancellation for this month alone. In South America, Colombia discounted its 20 year peso debt offer by 40% loss. In China, a cash shortage led to failures during its Ministry of Finance led debt sales.

The biggest culprit in this financial house of cards is the pronouncements by Federal Reserve Chairman Ben Bernanke's remarks on tightening credit policy, ending 'cheap money' that spurred investments in the world economy.