The global debt market is orders of magnitude larger than the stock market, and debt instruments across the globe have nearly reached the breaking point due to the Fed's steady increase in interest rates this year (combined with seemingly endless money printing and other disastrous fiscal policies).

Because bond values have an inverse relationship with interest rates, as interest rates go up, the value of bonds and other debt instruments already issued goes down. With each Fed rate increase, bond values are cratering, leaving debt investors holding substantial losses and leading to a collapse in the number of potential buyers even willing to take possession of these bonds.

As investor Larry McDonald says in this Marketwatch article, "things are breaking." From the article:

Pointing to the bond-market turmoil in the U.K., McDonald said government bonds with 0.5% coupons that mature in 2061 were trading at 97 cents to the dollar in December, 58 cents in August and as low as 24 cents over recent weeks.

When asked if institutional investors could simply hold on to those bonds to avoid booking losses, he said that because of margin calls on derivative contracts, some institutional investors were forced to sell and take massive losses.

McDonald said that if the Federal Reserve raises the federal funds rate by another 100 basis points and continues its balance-sheet reductions at current levels, "they will crash the market."