Global Debt

amandstu

Am I being pedantic -or am I right to think it makes a difference to point out the the global endebtedness is actually around zero (not counting environmental factors which seem to be pushing the globe , never mind the global economy, to ruin) ?

I mean , when I pick up a paper figures are given out about the global level of endebtedness running into the trillions but nowhere is there a mention of who are the donor nations that are financing all these borrowings.

Don't the 2 (well many more than 2 but 2 classes) sides balance each other out ?

If the above is true , then does the problem arise because the "donor" countries are worried about getting their money back at some point?

I just can't work it out .
Isn't this some kind of a closed (financial ) system -albeit very large,very complicated, ridiculously fast moving and unstable?

But not a problem of overall endebtedness (which is , theoretically , zero)

Scofflaw

We don't owe money to any other planets, certainly - not even Fianna Fáil managed that - so the net sum of global dent is zero. The devil, as they say, is in the details.

A good example of that is the debt owed within the Irish private sector - back in 2004 (the last time I saw a figure put on it) large Irish businesses owed Irish SME's something like €10bn net, which was in effect a huge loan from small companies to larger companies, primarily in the form of late payments for goods and services.

So, yes, it's a "closed (financial ) system -albeit very large,very complicated, ridiculously fast moving and unstable".

cordially,
Scofflaw

amandstu

So can we take the global (or national) financial system as being analogous to a human body , where the the flow of borrowings and lendings can be seen as having to overcome an initial level of resistance before circulation proceeds "normally"?

Since there are blockages in the system at various intersections this slows down the circulation within the body as a whole.

Would that be a working model?

If so it would seem to be necessary to "prime the pump" at a high enough level in the system to flush out the blockages ( a bit like my drains).

Andy Mc

The problem is that for every debt whether it could be a country or a persons mortgage there is a depositor or a donor.
To make the problem worse I read somewhere that 50% of the world's wealth is controlled by 1% of the population.
Therefore the debt is owed to people like Bill Gates, Abramovich, Tiger Woods, the Premier league footballers as well as some of the natural resouce rich countries like Qatar, Libya.
The problem gets worse every year with the rich depositers getting richer and the poor (borrowers) getting poorer until something like the global financial crisis of 2008 occurs.
What we are seeing now over the last 3 years is a game where the rich (depositers/ bondholders) want their money but there is a realisation that a number of the poor (borrowers) cannot repay.

Scofflaw

amandstu wrote: »

So can we take the global (or national) financial system as being analogous to a human body , where the the flow of borrowings and lendings can be seen as having to overcome an initial level of resistance before circulation proceeds "normally"?

Since there are blockages in the system at various intersections this slows down the circulation within the body as a whole.

Would that be a working model?

If so it would seem to be necessary to "prime the pump" at a high enough level in the system to flush out the blockages ( a bit like my drains).

I'm not sure to what extent the analogy holds, although it does offer some appealing sub-analogies: the more rapidly the money circulates, the more risk of a heart attack (through high money pressure!), for example - and high money pressure appears to cause the equivalent of strokes in the brains of those responsible for its management. The process of deregulation could be compared to financial Viagra, which resulted in blood being pumped in large quantities to inappropriate parts of the body.

Also, in the case of a major shock, the blood tends to be withdrawn from the extremities towards the centre, where it may flow unevenly. A sufficiently large shock may cause a systemic circulatory failure - a seizure not unlike that currently being suffered by the global financial system. The question at this moment is whether the seizure will be fatal - the patient is still lying on the trolley in the emergency room, and the economic doctors are clustering round each with their patent defibrillator in hand.

cordially,
Scofflaw

Scofflaw

Andy Mc wrote: »

The problem is that for every debt whether it could be a country or a persons mortgage there is a depositor or a donor.
To make the problem worse I read somewhere that 50% of the world's wealth is controlled by 1% of the population.
Therefore the debt is owed to people like Bill Gates, Abramovich, Tiger Woods, the Premier league footballers as well as some of the natural resouce rich countries like Qatar, Libya.
The problem gets worse every year with the rich depositers getting richer and the poor (borrowers) getting poorer until something like the global financial crisis of 2008 occurs.
What we are seeing now over the last 3 years is a game where the rich (depositers/ bondholders) want their money but there is a realisation that a number of the poor (borrowers) cannot repay.

In fact, there has been no really major change in the level of inequality globally, and certainly nothing at all that would explain the current crisis in those terms:



The Gini coefficient is a measure of inequality of the kind you refer to originally.

cordially,
Scofflaw

srsly78

amandstu wrote: »

So can we take the global (or national) financial system as being analogous to a human body , where the the flow of borrowings and lendings can be seen as having to overcome an initial level of resistance before circulation proceeds "normally"?

Since there are blockages in the system at various intersections this slows down the circulation within the body as a whole.

Would that be a working model?

If so it would seem to be necessary to "prime the pump" at a high enough level in the system to flush out the blockages ( a bit like my drains).

Yes it is a good analogy. Economic simulators have even been built from pipes and tanks of water -> http://en.wikipedia.org/wiki/MONIAC_Computer

Scofflaw

srsly78 wrote: »

Yes it is a good analogy. Economic simulators have even been built from pipes and tanks of water -> http://en.wikipedia.org/wiki/MONIAC_Computer

Indeed - there's even a spoof version in a Terry Pratchett.

cordially,
Scofflaw

amandstu

I think the French and the Germans are suggesting a financial transaction tax (unless my memory is wrong) .
Can this be enforced realistically and would it be any kind of a remedy ?
I can imagine that countries with a profitable financial sector would oppose it.

Scofflaw

amandstu wrote: »

I think the French and the Germans are suggesting a financial transaction tax (unless my memory is wrong) .
Can this be enforced realistically and would it be any kind of a remedy ?
I can imagine that countries with a profitable financial sector would oppose it.

The proposal is from the Commission and Parliament rather than France and Germany. It is, naturally enough, opposed by the UK - that is, by the City of London.

It can certainly be enforced - the kind of financial transactions it's aimed at are necessarily a matter of record (and to a fair extent the tax would be generated automatically by the actions of trading software). As for a remedy - I'm not sure what it would be a remedy for? The Commission is proposing it as a way of making the financial sector pay their way, and as a mechanism for funding the EU that alleviates the payment burden on the Member States.

cordially,
Scofflaw

amandstu

well by enforced I meant could one country or a number of countries prevent its working merely by not being on board? (rather like offshore tax havens )?

As a remedy I picture it as a way of reducing turbulence in the MONIAC machine srsly78 referred to since it might slow down the flow of the transactions if a price was levied (a bit like the idea for reducing spam by requiring the sender of an email to pay a very small amount - like a tiny postage stamp) .

Could it also be a way of combatting computer trading?

I have no experience (or even anything more than slight knowledge) of all that save to say it seemed like it presaged Armageddon when it first became a problem a ferw years ago -but it doesn't seem to concern people so much now.
However , if computer trading (when the software makes automated buy and sell decisions) relies upon making a very large amount of small value decisions as well as the occasional huge one, maybe a tax on financial transactions would limit its influence as well as making it more exposed to the financial tax .

Uuuh Patsy

Scofflaw wrote: »

So, yes, it's a "closed (financial ) system -albeit very large,very complicated, ridiculously fast moving and unstable".

cordially,
Scofflaw

Sorry but how do how do you figure its a closed financial system if we have a corrupt banking system using derivatives and debt default swaps as a form of gambling to create debt out of thin air and a corrupt private federal reserve in the US trying to plug this debt hole by printing money out of thin air... Far from closed system... Some estimates say the global debt could be as high as US1500 trillion, which exceeds all known wealth on the planet.. Doesnt sound anything like a closed system..

Scofflaw

Uuuh Patsy wrote: »

Sorry but how do how do you figure its a closed financial system if we have a corrupt banking system using derivatives and debt default swaps as a form of gambling to create debt out of thin air and a corrupt private federal reserve in the US trying to plug this debt hole by printing money out of thin air... Far from closed system... Some estimates say the global debt could be as high as US1500 trillion, which exceeds all known wealth on the planet.. Doesnt sound anything like a closed system..

Closed in the sense that we don't owe money to any other planet - all debt is owed within the system, so the sum total is zero. Open in the sense that money can be created or destroyed, certainly.

For the amount of debt to exceed the total wealth of the planet isn't possible, though - all that it means is that the wealth hasn't been properly valued in terms of the amount of money available.

To clarify that: if we have an apple, and the total amount of money we have between us is €2, the value of the apple is €2 - in a closed system consisting only of you and me where the only valuable good is the apple.

If we find another €2 down the sofa, we do not now have "more money" than the "total wealth of the system" - instead, we've just experienced 100% inflation, and the apple is now "worth" €4, because there is no other apple, and no other valuable good, and the total valuable goods in the system are necessarily worth the total money in the system. I appreciate that's counter-intuitive, because you might think "well, I'm only going to pay €2 for the apple, and keep the other €2", but there's nothing else to buy in the system, so the other €2 is now completely valueless - it's no longer money, and you might as well put it back down the sofa.

All of the wealth (things you can buy) in the world = all the money (things you can buy with) in the world.

Last time I looked, by the way, the total global credit was only (!) c. $106 trillion (2010).

cordially,
Scofflaw

Cavehill Red

That only works if you have proper price discovery mechanisms, which the current markets no longer have, as the obfuscatory methods used by the banks (the repackaging of sub-prime lending into AAA rated investment products, for example) has led to a scenario where we're finding another 2 euro down the sofa every few minutes and at the same time, we don't know if the apple is real, gone bad, been eaten or was just the promise of an apple.

That's straining your analogy, but I'm sure you see what I'm getting at.

Scofflaw

Cavehill Red wrote: »

That only works if you have proper price discovery mechanisms, which the current markets no longer have, as the obfuscatory methods used by the banks (the repackaging of sub-prime lending into AAA rated investment products, for example) has led to a scenario where we're finding another 2 euro down the sofa every few minutes and at the same time, we don't know if the apple is real, gone bad, been eaten or was just the promise of an apple.

That's straining your analogy, but I'm sure you see what I'm getting at.

I do:

For the amount of debt to exceed the total wealth of the planet isn't possible, though - all that it means is that the wealth hasn't been properly valued in terms of the amount of money available.

And of course the uncertainty over the value of assets and the amount of credit makes proper valuation difficult, which in turn causes trading to dry up, since you don't know from moment to moment whether a deal is good or bad.

cordially,
Scofflaw

MeisterG

The zero sum game question generally works, however there are some simple examples of where indebtedness can go off the scale with no corresponding visible asset. Pensions being an example. Essentially borrowing from the future makes the system "open" and in some ways we are indebted to a different planet, as it is so far down the road.

Uuuh Patsy

MeisterG wrote: »

The zero sum game question generally works, however there are some simple examples of where indebtedness can go off the scale with no corresponding visible asset. Pensions being an example. Essentially borrowing from the future makes the system "open" and in some ways we are indebted to a different planet, as it is so far down the road.

Its pretty clear to me the system has been broken open and was never really going to work once they decoupled it from the gold standard. It probably not gonna be fixed without the use of a reset button of some form. In the meantime it looks to me like the wealthy are trying to gather up much additional wealth as possible before that button is pressed... maybe thats my conspiracy theorist mind.

amandstu

Scofflaw wrote: »

If we find another €2 down the sofa, we do not now have "more money" than the "total wealth of the system" - instead, we've just experienced 100% inflation, and the apple is now "worth" €4, because there is no other apple, and no other valuable good, and the total valuable goods in the system are necessarily worth the total money in the system. I appreciate that's counter-intuitive, because you might think "well, I'm only going to pay €2 for the apple, and keep the other €2", but there's nothing else to buy in the system, so the other €2 is now completely valueless - it's no longer money, and you might as well put it back down the sofa.

I think that is where the services sector comes in (this is beginning to sound like Adam and Eve) and the one without the apple considers whether it is possible , in return for a service to keep the money AND the apple (viewers look away now)

pacquiao

Why don't you just say when all the promissory notes are returned to the issuer, there's no more money left?

amandstu

pacquiao wrote: »

Why don't you just say when all the promissory notes are returned to the issuer, there's no more money left?

the notes are just the physical manifestation of an agreement between parties.
If you are at war in an army then you can't just walk away because money has been abolished overnight (you will be likely shot for desertion)
The currency is just a physical symbol of the ongoing relationship between the parties (garanteed by the banker)

srsly78

amandstu wrote: »

Could it also be a way of combatting computer trading?

The "computer trading" that is so commonly misunderstood is beneficial to the system. It helps the market move quicker, analogous to stuff moving faster thru the pipe of the water analog system. http://en.wikipedia.org/wiki/Efficient-market_hypothesis

pacquiao

amandstu wrote: »

the notes are just the physical manifestation of an agreement between parties.
If you are at war in an army then you can't just walk away because money has been abolished overnight (you will be likely shot for desertion)
The currency is just a physical symbol of the ongoing relationship between the parties (garanteed by the banker)

What book have you just read?

amandstu

srsly78 wrote: »

The "computer trading" that is so commonly misunderstood is beneficial to the system. It helps the market move quicker, analogous to stuff moving faster thru the pipe of the water analog system. http://en.wikipedia.org/wiki/Efficient-market_hypothesis

that seems to be a theory (and ,from a quick glance at your link,not especially authoritative)but where I am coming from is that the speed of movement may lead to chaos and destroy or degrade the whole system even though it may have been functioning efficiently up to that point.
I think (some kinds of heart attacks )have been linked to chaotic movement in the blood .

amandstu

pacquiao wrote: »

What book have you just read?

well truthfully the only book I have read for the past 10 -20 years is Harlot's Ghost by Norman Mailer as I was laid up for over a month with a swollen leg.
In times of war money does get destroyed overnight and life carries on

pacquiao

Article so

amandstu

not quite sure what you mean but I don't read articles on the economy for fun.I realise I am posting in an economy forum where some of the posters I would expect would have studied the subject in some depth.
I don't and haven't -apart from having lived through the economic weather from the 60 s until now.
I seem to remember one of the refrains that used to go up was that * this time* no-one knows what is going on.
Thankfully the economy seems unbreakable in the long/medium run or that would be even more worrying since it won't stand still to allow you to observe it and the rate of change is accelerating all the time.

Scofflaw

amandstu wrote: »

I think that is where the services sector comes in (this is beginning to sound like Adam and Eve) and the one without the apple considers whether it is possible , in return for a service to keep the money AND the apple (viewers look away now)

Nope, because then you've introduced another valuable good (or valuable good time, perhaps) into the system.

srsly78 wrote:

The "computer trading" that is so commonly misunderstood is beneficial to the system. It helps the market move quicker, analogous to stuff moving faster thru the pipe of the water analog system. http://en.wikipedia.org/wiki/Efficie...ket_hypothesis

I tend to agree with amandstu here - speed of movement isn't in itself a market improvement, particularly when it's achieved by market-following algorithms. It's hard to see how software trading can make the market more efficient (in the sense of better adjusting pricing to value) when they actually operate by analysing the market itself. And the occurrence of chaotic movements in the markets was identified several decades ago by Mandelbrot himself.

cordially,
Scofflaw

Debtocracy

If you think that global debt will one day even itself out and reach equilibrium you would be grossly mistaken. You’re forgetting about the application of interest which is a virtual construct that is not limited by the constraints of the money supply or the physical world. Once the point of debt saturation is reached, the debt system functions according to the following positive feedback cycle:

1. Existing debt so great that large amounts of new debt are needed to pay off existing debt.
2. Because money cannot circulate properly in a debt saturated economy, new debt does not produce the economic growth required to compensate for the extra debt burden it has created.
3. Back at step 1. with a larger debt load. The gap between the required economic growth and the debt burden at step 2. widens due to greater debt saturation.

srsly78

Scofflaw wrote: »

Nope, because then you've introduced another valuable good (or valuable good time, perhaps) into the system.



I tend to agree with amandstu here - speed of movement isn't in itself a market improvement, particularly when it's achieved by market-following algorithms. It's hard to see how software trading can make the market more efficient (in the sense of better adjusting pricing to value) when they actually operate by analysing the market itself. And the occurrence of chaotic movements in the markets was identified several decades ago by Mandelbrot himself.

cordially,
Scofflaw

If you think we should throw all computers out the window and go back to pen and paper then you obviously don't get it I was not talking about HF trading. More about the general impact of information technology on finance.

Scofflaw

srsly78 wrote: »

If you think we should throw all computers out the window and go back to pen and paper then you obviously don't get it I was not talking about HF trading. More about the general impact of information technology on finance.

And I was talking about HF trading and trading algorithms, rather than the general impact of technology on finance, so we seem to be talking about two different things.

Obviously I'd agree with you that the use of IT in general makes the market more efficient - following the general rule that faster transmission of information makes markets more efficient and reduces arbitrage opportunities, just as telephony did in its day - but I'm a little disturbed that anyone would still refer to the application of IT in finance as 'computer trading', as if it were some kind of new-fangled and slightly untrustworthy approach! To me that phrase would imply computers doing the trading, which is a rather different ball-game.

cordially,
Scofflaw

carveone

Just to be annoying here, I do kinda wonder how is it seems that every single country in the world is running a deficit at the same time? So logically you come to the conclusion that either China has so much of a surplus that they are funding everyone else or everyone is printing money 24/7.

If the latter is the case – where’s the inflation? The world has a $60Tn GDP and a $4Tn annual deficit. So shouldn't prices go up the same as the 6.66% (inflation of the beast) printing of money that must be occurring somewhere.

I don't know - I'll read more Scofflaw posts

Edit: I think I'm implying that the governments of the world (mostly the US) are having a good old fib about inflation. I wonder how long that will hold up for...

amandstu

Debtocracy wrote: »

If you think that global debt will one day even itself out and reach equilibrium you would be grossly mistaken. You’re forgetting about the application of interest which is a virtual construct that is not limited by the constraints of the money supply or the physical world. Once the point of debt saturation is reached, the debt system functions according to the following positive feedback cycle:

1. Existing debt so great that large amounts of new debt are needed to pay off existing debt.
2. Because money cannot circulate properly in a debt saturated economy, new debt does not produce the economic growth required to compensate for the extra debt burden it has created.
3. Back at step 1. with a larger debt load. The gap between the required economic growth and the debt burden at step 2. widens due to greater debt saturation.

If you are addressing me then I don't think I implied that debt equilibrium was some kind of a nutural state - although presumably there will be times in the future , hopefully , when greater equilibrium of a kind might happen for certain lengths of time.

I was just scratching my head why , if endebtedness is such a bad thing , nobody seems to give a thought to the presumably lucky lenders who have to be making up the other half of the arrangement (China ?)

Scofflaw

carveone wrote: »

Just to be annoying here, I do kinda wonder how is it seems that every single country in the world is running a deficit at the same time? So logically you come to the conclusion that either China has so much of a surplus that they are funding everyone else or everyone is printing money 24/7.

If the latter is the case – where’s the inflation? The world has a $60Tn GDP and a $4Tn annual deficit. So shouldn't prices go up the same as the 6.66% (inflation of the beast) printing of money that must be occurring somewhere.

I don't know - I'll read more Scofflaw posts

Edit: I think I'm implying that the governments of the world (mostly the US) are having a good old fib about inflation. I wonder how long that will hold up for...

Inflation is the gap between value being created (purchasable goods and services) and money supply (which you can purchase with). So if the world's money supply expands at 4%, and the amount of value expands at 2%, you can expect 2% inflation. The figures you've given for the increased amount of money - 6.66% - would have to be balanced against world GDP growth of 4.9%.

Just to be annoying here, I do kinda wonder how is it seems that every single country in the world is running a deficit at the same time? So logically you come to the conclusion that either China has so much of a surplus that they are funding everyone else or everyone is printing money 24/7

Or that the private sector are the ones buying the debt, which is what's happening. Consider the Greek deficit - Greek public debt is owned by a lot of European banks (hence the contagion fears in the event of a Greek default), so there's no balancing positive in some other country's public debt. Instead that debt shows up in private sector balances. When every country in the world is running a deficit in their public finances, it means that they're being funded by borrowing from the private sector.

cordially,
Scofflaw

amandstu

Scofflaw wrote: »

Inflation is the gap between value being created (purchasable goods and services) and money supply (which you can purchase with). So if the world's money supply expands at 4%, and the amount of value expands at 2%, you can expect 2% inflation. The figures you've given for the increased amount of money - 6.66% - would have to be balanced against world GDP growth of 4.9%.



Or that the private sector are the ones buying the debt, which is what's happening. Consider the Greek deficit - Greek public debt is owned by a lot of European banks (hence the contagion fears in the event of a Greek default), so there's no balancing positive in some other country's public debt. Instead that debt shows up in private sector balances. When every country in the world is running a deficit in their public finances, it means that they're being funded by borrowing from the private sector.

cordially,
Scofflaw

So are you saying that the private sector is funding this lending through its real world wealth creation?
Could I ask for examples of primary wealth creation (as opposed to monetary wealth creation-I know the banks get their money from Central Bank and I am not talking about that) ?
Are we talking about mining, drilling , human labour? Would Computer manufacturing ,for example , be secondary in that regard- so not original?

Scofflaw

amandstu wrote: »

So are you saying that the private sector is funding this lending through its real world wealth creation?

Where else would it come from?

amandstu wrote: »

Could I ask for examples of original wealth creation (as opposed to monetary wealth creation-I know the banks get their money from Central Bank and I am not talking about that) ?
Are we talking about mining, drilling , human labour? Would Computer manufacturing ,for example , be secondary in that regard- so not original?

Computer manufacturing would certainly be wealth creation - a computer, once constructed, has more value than its components. Value is created by any process whose output is more useful than its input, whether that's an artist taking paint and producing paintings, a miner producing ore, or an analyst producing a report out of knowledge.

cordially,
Scofflaw

srsly78

Scofflaw you might be surprised to learn that "open outcry" trading was only replaced in the late 90s.

Scofflaw

srsly78 wrote: »

Scofflaw you might be surprised to learn that "open outcry" trading was only replaced in the late 90s.

Not really - computerisation of industry generally has really only happened over the last 15 years, and in many places the computer is still a combination desktop calculator, typewriter and fax machine, which makes the financial industry rather a leader in the matter. I have to admit, though, that being part of the IT industry does tend to make one a little prone to the kind of misinterpretation I made of your phrasing!

cordially,
Scofflaw

amandstu

Scofflaw wrote: »

Where else would it come from?

I am not quite sure what I meant but I was trying in my own mind to differentiate it from the money printed by the central banks (since you seemed to lump in the banks as part of the private sector and in my mind's eye they weren't .)

I suppose that the money that banks take in comes from the private sector even though I had a picture in my head of the banks being kind of a sub branch of the central bank with a hotline to funds.

Scofflaw

amandstu wrote: »

I am not quite sure what I meant but I was trying in my own mind to differentiate it from the money printed by the central banks (since you seemed to lump in the banks as part of the private sector and in my mind's eye they weren't .)

I suppose that the money that banks take in comes from the private sector even though I had a picture in my head of the banks being kind of a sub branch of the central bank with a hotline to funds.

Ah - there might be a confusion. Value is created by the private non-financial sector (and by some parts of the public sector), and money is created by the banks, both private and central. Well, simplistically at least - in fact the private non-financial sector also creates money, by offering credit, while the banks also may create value (although I'm dubious there).

So on the one hand we have the creation of things worth buying (value) and on the other the creation of money to buy it with.

cordially,
Scofflaw

Brayruit

Very interesting post with some good contributions imo.

I have a few views / conclusions and would welcome feedback as to whether posters think that they are correct...

• The quantity of all of the money in the world = the quantity of all of the (tradeable? economic?) value in the world
• If the amount of (t/e) value changes, the value of all of the money changes
• If the amount of all of the money changes, the unit value of all of the money changes (== inflation / deflation)
• The (t/e) value can include goods and services in the future, i.e. the "owner" of an asset can be paid in advance of that asset's creation (== debt)
• "Money" here needs to be (perhaps tautologically) defined in some way so that it is equal to the total (t/e) value number
• The world's balance sheet balances. Money = Value.
• The world's balance sheet balances. Debt liabilities = debt assets.

Goping back to OP, I think that it is correct that there is a counterparty to every piece of problem debt. The problem from a global economic perspective(as opposed to Irish or European perspective or the perspective of the holder of debt assets, i.e. a creditor) is that the debt crisis hits economic activity / value creation very hard - and hence everyone is worse off. This means that the amount of value goes down, but so does the amount of money (as debt assets are written off).

In the global boom times, the amount of economic activity was frantic and fuelled by massive debt. Once the debt was removed, the tide went out and nobody was wearing any trousers. The debtors means of value creation dried up and the value of the creditors assets evaporated. The creditors' clever trick is to get governments (i.e. future tax payers) to protect them from this reality.

It would be a better trick to set everybody's clocks back to 2007 and convince them that the past 4 years were just a dream... they should go back to behaving as if nothing had happened (oh, but maybe we could start to ever so slowly reduce the amount of debt in the world?... you know, just in case that bad dream might come true).

Another solution would be high inflation for a few years (i.e. more money units) - enough to significantly reduce the real value of public and private debt. I won't be betting against it.

Brayruit

... The bit that's still missing for me though is who the creditors are ... China? German pension funds? ... Doesn't seem to be enough.

Nothingbetter2d

Scofflaw wrote: »

We don't owe money to any other planets,
Scofflaw

at least us irish dont..... i believe nasa crashed a few hundred billion dollars into mars a few times.... now was it metres or yards again???