Global debt saturation. So why not just cancel most debt?

[noddyboy]

Nobody made that point (so far). The point was that your suggested link to an aging population is nonsense and that erasing debt destroys faith in the basic concept of debt. No investor will ever invest in debt again unless there are mechanisms in place that place powers in an investor's toolset to enforce the repayment of debt. Anyone who ever invests again a penny in Argentina should be crucified or deserves to lose every single last penny. That includes fund managers who manage pension accounts and bought Argentinian sovereign debt. Rewarding bad actors reinforces bad principles and destroys the faith that is necessary for debt to exist in the first place.

By forgive, I mean the Fed should just forgive the US Treasury. So no one other than the Fed is missign money owed.

 

[GRULSTMRNN]

Nice dream, if it worked that way every central bank and government in the world would do it. It would instantaneously destroy the currency and would make imported products unaffordable for all citizens of that country. It would also prevent every lender to not ever lend to that nation again. Such thoughts can only originate from people who have never experienced inflationary cycles. What would you call a Chinese or HK person who stubbornly insists that property prices can only go up? You would rightly call such person a fool. Just because one has never gone through inflationary cycles and has not studied history does not mean such facts do not exist. Food for thought...

By forgive, I mean the Fed should just forgive the US Treasury. So no one other than the Fed is missign money owed.

 

[noddyboy]

Nice dream, if it worked that way every central bank and government in the world would do it. It would instantaneously destroy the currency and would make imported products unaffordable for all citizens of that country. It would also prevent every lender to not ever lend to that nation again. Such thoughts can only originate from people who have never experienced inflationary cycles. What would you call a Chinese or HK person who stubbornly insists that property prices can only go up? You would rightly call such person a fool. Just because one has never gone through inflationary cycles and has not studied history does not mean such facts do not exist. Food for thought...

Not saying every country, but I think nothing bad will happen to the US if we just have the Fed cancel a few trillion.

 

[GRULSTMRNN]

Really? What do you think the Chinese and Japanese will think of that plan, given Americans borrowed from them?

Not saying every country, but I think nothing bad will happen to the US if we just have the Fed cancel a few trillion.

 

[noddyboy]

I bet everyone here owns a stock that has done a stock buyback. Either directly or through a 401k that invests in the S&P500. So the Fed cancelling Treasuries is basically a bond buyback. Is it really that crazy? If so, why are you still holding companies that have done a stock buyback?

 

[noddyboy]

Really? What do you think the Chinese and Japanese will think of that plan, given Americans borrowed from them?

They might think that they have a higher priority claim on an asset base that hasn't changed. Fewer shares, but nothing else changed.

 

[tiddlywinks]

Not saying every country, but I think nothing bad will happen to the US if we just have the Fed cancel a few trillion.

What happens to the people, programs, profits, and operations that are dependent on and affected by the INTEREST that is paid on those "few trillion"?

Socialists in the US are currently floating the idea of student loan cancellation. Where did/does the money come from in the first place? And going forward, where from? btw, Clinton made the law that student loan debt is not dismiss-able through bankruptcy. Think it through... you haven't.

 

[morganist]

Hey!

I don´t know if debt and growth can continue to expand or not. Some say no.
I am no economist but if so why can´t much the the global debt be erased if enough central banks help each other taking control of the markets so they don´t go crazy?

One person's debt is another person's asset. Someone has lent the money in the first place, if the money is not paid back it will come at the cost of the lender losing their money. The money lent is the money everyone has in bank accounts and pensions, so by defaulting on debt payments bank account funds would be written off and people would lose their pensions.

 

[Scataphagos]

One person's debt is another person's asset. Someone has lent the money in the first place, if the money is not paid back it will come at the cost of the lender losing their money. The money lent is the money everyone has in bank accounts and pensions, so by defaulting on debt payments bank account funds would be written off and people would lose their pensions.

CORRECTAMUNDO!

Canceling debt means "somebody takes it in the shorts".

Debt ALWAYS gets accounted for... by somebody.

 

[GRULSTMRNN]

OMG, and you have 2900 posts? A buy back is paid with money you own.

I bet everyone here owns a stock that has done a stock buyback. Either directly or through a 401k that invests in the S&P500. So the Fed cancelling Treasuries is basically a bond buyback. Is it really that crazy? If so, why are you still holding companies that have done a stock buyback?