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Debt Worldwide Hits Record $86k per Person

bloomberg.com

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Re: Debt Worldwide Hits Record $86k per Person

#41

Post by prostoalex »

jdoliner wrote: post #2

Does anyone actually still believe that these debts will all someday be repayed? Does anyone even believe that the amount of debt will go down, rather than up, over the course of any length of time? Even a day? I don't, which raises the question: how does a world where debt monotonically increases indefinitely work? Can that happen forever, in which case debt has just become a standin for currency (that allows people…

> how does a world where debt monotonically increases indefinitely work?

The interest rate (and hence service payments) on such debt tends to rise. The lenders just price the possibility of distant default and demand fatter checks upfront.

> Or does it eventually go kabloie?

I am not sure all scenarios are as drastic as you describe. A bunch of countries have a privilege to issue debt in the currencies they themselves control and can inflate their way out of it.

People who have paid up a portion of their mortgage can get interested in a HELOC, provided that the interest rates are attractive, or even buy a second house / rental property once the credit situation allows them. Their growing debt is not necessarily an indication of a bad balance sheet - they have tons of collateral and just choose to use the debt mechanisms when it makes sense for them.

Re: Debt Worldwide Hits Record $86k per Person

#42

Post by [deleted] »

rukittenme wrote: post #25
iscrewyou wrote: post #17

Earlier quoted context omitted.

So, speaking in terms of net value, you don’t have debt.

Assets = Liabilities + Equity. In other words, $350k home = $300k mortgage + $50k in equity. You still have debt. Its just that the debt was exchanged for something. Its the same equation for credit card debt. No one takes on debt without receiving something in return.

[deleted]

Re: Debt Worldwide Hits Record $86k per Person

#43

Post by joobus »

aurailious wrote: post #19
jdoliner wrote: post #2

Does anyone actually still believe that these debts will all someday be repayed? Does anyone even believe that the amount of debt will go down, rather than up, over the course of any length of time? Even a day? I don't, which raises the question: how does a world where debt monotonically increases indefinitely work? Can that happen forever, in which case debt has just become a standin for currency (that allows people…

> Does anyone actually still believe that these debts will all someday be repayed? I don't understand why you would ask this question. On the individual level its obvious that some debts won't be. It happens all the time for a lot of reasons. So I assume you aren't talking about the individual level. But on the macro level zero debt is a very bad idea and unless civilization collapses there will always be debt. Debt…

This reads like a person with Stockholm syndrome, captured by the Federal Reserve system. Money/currency does not have to be debt based. For a lot of America's history, it was not debt based.

Re: Debt Worldwide Hits Record $86k per Person

#44

Post by EpicEng »

intralizee wrote: post #20
AnimalMuppet wrote: post #12

Earlier quoted context omitted.

That might be nice, but... how, exactly? By writing off the debts? That's not so nice for those who are owed. A bunch of those are pension funds, for example. If peoples' pensions get wiped out by by all debts being forgiven, they won't be so happy. By the government giving money to people? But where does the government get the money? By taking on debt? Then the government's even more deeply in debt, which means that…

I guess creating more money as you wrote. I believe the government has boosted the economy by giving money to workers to fix things that are not necessarily at the end of life. So to boost the economy by adding more money into the system. I believe it would be a similar strategy.

So hyper inflation is your solution?

Re: Debt Worldwide Hits Record $86k per Person

#47

Post by CoolGuySteve »

tvural wrote: post #28
jdoliner wrote: post #2

Does anyone actually still believe that these debts will all someday be repayed? Does anyone even believe that the amount of debt will go down, rather than up, over the course of any length of time? Even a day? I don't, which raises the question: how does a world where debt monotonically increases indefinitely work? Can that happen forever, in which case debt has just become a standin for currency (that allows people…

It's worth reading the Ray Dalio debt crisis book to see how this might end - the most likely scenario is the US, Japan, and EU all encountering cash flow problems in the next recession that they resolve by devaluing their currency. In that sense people have less money today than they believe. If all the major currencies and stock markets crash at the same time, there's no safe place for everyone to keep their money.

A fixed or limited supply asset will hold its value against fiat currencies devaluing to some extent. Although it's likely that a scarce asset like gold/bitcoin is already artificially inflated by people who currently hold this belief.

If those people then liquidate their scarce asset in order to acquire more fiat currency after a devaluation then the market glut will devalue that scarce asset too to some extent.

Re: Debt Worldwide Hits Record $86k per Person

#49

Post by btilly »

politician wrote: post #30
TACIXAT wrote: post #13

Earlier quoted context omitted.

>runaway global warming will need a drastic solution I look forward to our subterranean future. I think the combination of vehicle automation and tunneling technology will allow us to build massive underground systems. If things get too rough on land, we can go below the surface.

I secretly believe that for all of the bluster about Mars, Elon's real goal is to produce the technology base necessary for humans to live here on Earth following the collapse of the biosphere. Why go to Mars to encounter an atmosphere hostile to life when we can all collectively experience right here at home? Storms washed out your fiber optic cables? Starlink. No place to hide from the hostile surface? Boring Co. N…

It is a nice theory, but there is a problem. The problem is that in the event of collapse, only SOME can reasonably be supported this way. And how to keep the unlucky masses from tearing down the means of survival for the lucky few?

The most effective answer is distance. While unlucky mobs can walk to your solar panels in the desert after civilization breaks down, how are they going to get to Mars? Get a good trampoline to jump on?

Re: Debt Worldwide Hits Record $86k per Person

#50

Post by dv_dt »

digianarchist wrote: post #45
ctdonath wrote: post #21

There's a reason ancient Judaism included a "Year of Jubilee", where all debts were forgiven every 50 years.

When is the next one?

Well the last one was post-2008, and if you didn't get your share, then perhaps you weren't one of corporate entities helped out by a Quantitative Easing program.
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