{"id":39975,"date":"2018-10-31T13:59:25","date_gmt":"2018-10-31T18:59:25","guid":{"rendered":"http:\/\/olduvai.ca\/?p=39975"},"modified":"2018-10-31T13:59:25","modified_gmt":"2018-10-31T18:59:25","slug":"debt-alarm-ringing","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=39975","title":{"rendered":"Debt Alarm Ringing"},"content":{"rendered":"
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Debt Alarm Ringing<\/a><\/h3>\n<\/header>\n
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Addicted to Debt<\/a>
\nLost Exorbitant Privilege<\/a>
\nTrigger Points<\/a>
\nFrankfurt, Cleveland, Golf, and Here and There<\/a><\/p>\n<\/div>\n

Is debt good or bad? The answer is \u201cYes.\u201d<\/p>\n

Debt is future spending pulled forward in time. It lets you buy something now for which you otherwise don\u2019t have cash available yet. Whether it\u2019s wise or not depends on what you buy. Debt to educate yourself so you can get a better job may be a good idea. Borrowing money to finance your vacation? Probably not.<\/p>\n

Unfortunately, many people, businesses, and governments borrow because they can, which for many is possible only because central banks made it so cheap in the last decade. It was rational in that respect but is growing less so as the central banks tighten their policies.<\/p>\n

Earlier this year, I wrote a series of articles (synopsis and links here<\/a>) predicting a debt \u201ctrain wreck\u201d and eventual liquidation\u2014an event I dubbed The Great Reset. I estimated we have another year or two before the crisis becomes evident.<\/p>\n

That\u2019s still my expectation\u2026 but I\u2019m beginning to wonder again. Several recent events tell me the reckoning could be closer than I thought just a few months ago. Today, we\u2019ll review those and end with a few suggestions on how to prepare.<\/p>\n

<\/a>Addicted to Debt<\/strong><\/p>\n

As noted, debt can<\/em> be appropriate\u2014even government debt, in some (rare) circumstances. I am glad FDR issued war bonds to help defeat the Nazis, for instance. Now, however, governments go into debt not because they face existential threats, but simply to keep their citizens and benefactors comfortable.<\/p>\n

Similarly, central banks enable debt because they think it will generate economic growth. Sometimes it does, too. The problem is they create debt with little regard for how it will be used. That\u2019s how we get artificial booms and subsequent busts.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Debt Alarm Ringing Addicted to Debt Lost Exorbitant Privilege Trigger Points Frankfurt, Cleveland, Golf, and Here and There Is debt good or bad? The answer is \u201cYes.\u201d Debt is future spending pulled forward in time. It lets you buy something now for which you otherwise don\u2019t have cash available yet. Whether it\u2019s wise or not […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,195,391,8226,21625],"class_list":["post-39975","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-debt","tag-growth","tag-john-mauldin","tag-thoughts-from-the-frontline"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39975","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=39975"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39975\/revisions"}],"predecessor-version":[{"id":39976,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39975\/revisions\/39976"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=39975"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=39975"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=39975"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}