What happens to the global economy when most countries' public debts climb to unreasonable levels?

[RageAgainstTDL]

Currently, as I understand it, most countries like America are funding all their spending through debt - money the government is continually borrowing from other nations.

Here's America's debt to GDP ratio:

The debt is now the size of the GDP.

China's in even more debt:

Canada's a bit better than America:

Western Europe's in roughly the same shape as Canada/USA:

I note that Greece is listed as having debt of 180% of GDP. Greece had to be bailed out by Germany, etc.

Is that the critical level?

What happens when the bigger economies are all pushing 180%+ and there's no one big enough to bail them out? What does it even mean in the end? I mean what does it mean if every country owes more money than they can reasonable have? It doesn't even make sense to me. How can everyone be in debt to this extent? If there's more debt than there is money, it would imply the money that supposedly went into creating the debt doesn't even really exist, right? It makes my head hurt.

Can anyone explain this and tell me what's going to happen?

 

[Guest2]

Not an economicel, but it looks as though the economies of the countries could reach hyperinflation, if other countries were to call in that debt, similar to the 1930s Germany.

However, it is very unlikely a country like China would call in debts from the USA, for example. This is because the USA (and other rich countries) are huge importers of Chinese goods, and crippling their economy would be good for no one, as citizens of the USA would no longer be able to afford Chinese products.
(Also, for the graphs, it's as a percentage, not a ratio. I got very concerned for a second lol).

 

[Ritalincel]

fema coffins

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[Deleted member 8353]

How can everyone be in debt to this extent? If there's more debt than there is money, it would imply the money that supposedly went into creating the debt doesn't even really exist, right? It makes my head hurt.

Well the money doesn't exist as something which remains the same, it's not something tangible. Whenever debt is being created you're also creating money, and therefore further devaluing money which is already in existence. Of course it's a lot more complicated than that, but this is the main problem with any economic system which is debt based, it just puts the burden onto the future.

 

[Modafincel]

Whenever debt is being created you're also creating money, and therefore further devaluing money which is already in existence.

This, when you create debt, you essentially create more money. The first instance of money was basically IOU cards that the Knights Templars gave to pilgrims. Countries pay off debt by printing money and creating inflation. Debt and inflation is not necessarily a bad thing. It keeps the economy going. You just need to maintain a balance. You can't create too much debt, and you can't print too much money and create too much inflation.

 

[Deleted member 60]

idk and I'm never going back to school

 

[mybodyisrotting]

You shouldn't mix up public debt and foreign debt tbh

 

[Braincel14w]

Money isn't just borrowed from other countries, it is also borrowed from collections of financial corporations who very much like lending money to governments because they are almost certain to get paid back and the interest payments are sweet.

If the country borrowing has an annual budget deficit (spends more than they get through tax each year) and no plan to reduce their deficit then they risk getting a bad credit rating which means they have to pay more interest. If it gets so bad that no one will lend them money then they have no money to pay the interest on the debt. They have to choose between funding schools, hospitals, national security and servicing their debt interest.

The point at which a countries debt is too high to stomach is subjective and depends upon the perception of their power, the ability to grow their economy, willingness to reduce public spending and their will to keep a good credit rating. A country's credit rating is decided by a few global credit rating institutions.

The governments with their own currency and central bank can print money to buy government bonds with. Essentially creating money for government to spend from nothing. In theory adding to the money supply should cause extra inflation but idk that this has happened the last 10 years in UK anyway. Maybe the effect is being stored up somehow and wil hit us all at once and screw us (probably will).

The problem with Greece is they do not have their own currency or their own central bank. Instead they are part of the Euro currency. A path out of crippling debt for a country is to devalue their currency and become much more competitive for their exports to foreign markets. These markets then buy more from Greece and the Greek economy grows to help pay for everything, keeping the population busy and not rioting over unemployment... Unfortunately Germany, who effectively controls the central Euro bank, doesn't want to devalue the Euro to help Greece out because Germany are doing just fine the way things are. Devaluing the Euro would just mean Germany has less money coming in, they don't need to increase their exports so much.

Greece should have left the Euro to solve this problem but they voted not to for reasons I don't know about, possible media brainwashing and misinformation but idk.

 

[YungCell]

The Jews call it quits on this round and wait for the rebound to start indebting everyone again.

 

[SkinnyBaldcel]

You have to out depth into a perspective for example if you are borrowing 200.000 and are 200.000 in depth it may sound like a lot but now considering that you earn 10k a month and can pay back 5k a month then the depth is not as bad as it initially sounded... Some countries are fucked tho like Greece and my previous posters were right money is worth less over time due to inflation

 

[Mainländer]

What Peter Schiff has been anticipating for years. The collapse of the fiat money system.

 

[GameDevCel]

don't you know, you only need to pay the interest

this shit is pretty much generation after generation putting more debt, and leaving this debt bubble for the future generations.

most of this debt is created to supply foids reckless spending, i made a thread about it

What Peter Schiff has been anticipating for years. The collapse of the fiat money system.

fiat currency is cancer, only benefits the ones in top

 

[Marquis de Sade]

As long as you have the means to print your own money without hyperinflation then you can literally spend spend spend, fiat currency allows that in comparison to being on gold standard but as someone famous said 'moneys not worth the paper its printed on'. Its a big scam an we all play along.

 

[FlyFace]

the economies of the countries could reach hyperinflation,

You only have to look at Zimbabwe and it's period of debilitating hyperinflation to truly understand how bad things can get.

This for instance is the biggest amount you could get in Zimbabwe during the hyperinflation.

 

[Guest2]

You only have to look at Zimbabwe and it's period of debilitating hyperinflation to truly understand how bad things can get.
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This for instance is the biggest amount you could get in Zimbabwe during the hyperinflation.

Yeah that's worth like 25p as well...

 

[FlyFace]

Yeah that's worth like 25p as well...

It's amazing how fucked an economy can become from hyperinflation.. all of the modern problems we face could easily be solved by taking Foids rights away from them.

 

[NoMoreSlaving]

Notice how the green countries don't have nearly the same amount of mass immigration, degeneracy, and anti-freedom propaganda

 

[G.Wizard]

Reminder that paper money is a Jewish fiction. What’s bad for the economy at large is bad for them.

 

[CopeWithTheRope]

Well, here in JEWSA they'll keep printing cash and taking private assets and social security to keep afloat and fund wars. Without constant war Amerika's economy would collapae. That is our biggest and most important export, death and destruction.

Notice any country not part of the federal reserve banking system, the USA is hostile towards. Part of the reason why JEWSA invaded the ME.

 

[Deleted member 15752]

The Jews call it quits on this round and wait for the rebound to start indebting everyone again.