A WORLD OF DEBT! $69,000,000,000,000 & forever ever ever ever growing!

I don't think so. I think what is going to happen is that there will be a very long period of sustained (nominal) growth while the debt increases indefinitely.

It will get so large that there won't be anywhere on earth that the capital can (safely) go to.

It will have to stay in the developed countries and in the equity markets and sovereign debt markets. This is because there isn't any alternative. It is arguable that this has already happened.
 
so After another week of bull run. Empty handed folks need another dose of pain killers to pass the weekend. Lol

There is an easier cure. Just buy a few shares of SPY. Next weekend you be recycling bullish articles lol.
 
Real Money said:
I don't think so. I think what is going to happen is that there will be a very long period of sustained (nominal) growth while the debt increases indefinitely.

It will get so large that there won't be anywhere on earth that the capital can (safely) go to.

It will have to stay in the developed countries and in the equity markets and sovereign debt markets. This is because there isn't any alternative. It is arguable that this has already happened.
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Under what conditions could there be a reset? Periodic resets are healthy.
 
Healthy? This is the reset.

Long ago the countries/kingdoms were in a competition.

Then they competed, in this order

crude technology, alliances, and political regime (royalty, religion)
engineering and navigation
industrially
military technology
territory
fiat currency (debt) regimes
nuclear weapons and world war

Strategic alliances were formed.

This process ended with a win for western nations and their allies.

And with a loss for Middle East, Russian, and Asian powers. (and the rest)

They created a debt based system so that they can dominate forever. Debt is the solution. It will keep foreign competitors on the backfoot in an endless game of catch up.

Massive and 'out of control' debt growth is the final solution. The only way to stop this new world order is by war and/or betrayal of the strategic alliances. This is the endgame.

The world powers want that pie chart to look the same in 500 years..............but some people don't like the way it's being split up. The winners don't care. Debt is a weapon.
 
Here's another thing. When the debt gets large it actually increases wealth and power of the nation in a debt based system.

Why?

Because the sovereign pays interest. This actually creates more money. If GDP can keep growing (competitively) and the economy keeps growing (nominally) then there will just be an increase in global position and power. That's the whole point of fiat currency. It is designed to grow the GDP as fast as possible. And in doing so, outgrow all other nations (while aiding allies). This is only possible if all of the allies align to protect their best interests and guarantee the exchange rate of the allied currencies.

This last bit is called the dirty float. AKA a Managed float regime.

The global economy is not a market economy, it's a political economy.
 
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increased debt is just a natural course with increased money.

every dollar that somebody is debted, it's a dollar somebody is credited... what is the problem here.
 
dozu888 said:
increased debt is just a natural course with increased money.

every dollar that somebody is debted, it's a dollar somebody is credited... what is the problem here.
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It's not a problem; it's an incredibly useful market artifact. Those "huge" debt numbers terrify fools into either staying out of the markets or providing liquidity on the short side when they do enter it. I've been long the market ever since I started trading, and I'm quite happy to see that effect.

But yeah, pretty much basic accounting: can't have a debit without a corresponding credit. And since the entire world is a closed system for those purposes, well... we know what the overall balance is.
 
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