$244,000,000,000,000.00 is over thrice world wealth:
https://www.bloomberg.com/news/articles ... ter-growth
World debt
- Tom Mazanec
- Posts: 4187
- Joined: Sun Sep 21, 2008 12:13 pm
World debt
“Hard times create strong men. Strong men create good times. Good times create weak men. And, weak men create hard times.”
― G. Michael Hopf, Those Who Remain
― G. Michael Hopf, Those Who Remain
- Tom Mazanec
- Posts: 4187
- Joined: Sun Sep 21, 2008 12:13 pm
Re: World debt
https://www.livewiremarkets.com/wires/t ... ebt-levels
For investors, the primary takeaway is a reminder that Chinese debt growth is unprecedented. Whilst Chinese debt is mostly internal and denominated in the home currency (emerging market debt busts often involve substantial foreign currency debts), this simply shifts the likely outworking of a debt bust. Rather than looking to Argentina or Venezuela as recent precedents, China looks much more like Japan in the late 1980s. It’s not just the debt growth and “miracle” economic growth that seems similar, the cultural and demographic likenesses are uncanny. A potential Chinese bust is therefore more likely to be a multi-decade malaise rather than a rapid plunge.
However, this scenario assumes that the heavy hand of the Communist Party remains. If an economic downturn leads to widespread revolt and a change of government, then a rapid plunge is the most likely outcome. This is one key difference with Japan, Chinese citizens have an unwritten bargain with their government that their continued submission relies upon their wealth increasing. If the wealth accumulation of recent decades turns out to be a Ponzi scheme, the citizens will turn on their government and there will be a fight for control. The current demonstrations in Hong Kong might be just a prelude to the main event.
For investors, the primary takeaway is a reminder that Chinese debt growth is unprecedented. Whilst Chinese debt is mostly internal and denominated in the home currency (emerging market debt busts often involve substantial foreign currency debts), this simply shifts the likely outworking of a debt bust. Rather than looking to Argentina or Venezuela as recent precedents, China looks much more like Japan in the late 1980s. It’s not just the debt growth and “miracle” economic growth that seems similar, the cultural and demographic likenesses are uncanny. A potential Chinese bust is therefore more likely to be a multi-decade malaise rather than a rapid plunge.
However, this scenario assumes that the heavy hand of the Communist Party remains. If an economic downturn leads to widespread revolt and a change of government, then a rapid plunge is the most likely outcome. This is one key difference with Japan, Chinese citizens have an unwritten bargain with their government that their continued submission relies upon their wealth increasing. If the wealth accumulation of recent decades turns out to be a Ponzi scheme, the citizens will turn on their government and there will be a fight for control. The current demonstrations in Hong Kong might be just a prelude to the main event.
“Hard times create strong men. Strong men create good times. Good times create weak men. And, weak men create hard times.”
― G. Michael Hopf, Those Who Remain
― G. Michael Hopf, Those Who Remain
- Tom Mazanec
- Posts: 4187
- Joined: Sun Sep 21, 2008 12:13 pm
Re: World debt
World Government Debt to Hit Record $53 Trillion This Year: S&P Global
https://www.nytimes.com/reuters/2020/02 ... -debt.html
https://www.nytimes.com/reuters/2020/02 ... -debt.html
“Hard times create strong men. Strong men create good times. Good times create weak men. And, weak men create hard times.”
― G. Michael Hopf, Those Who Remain
― G. Michael Hopf, Those Who Remain
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