{"id":40490,"date":"2018-11-14T06:45:40","date_gmt":"2018-11-14T11:45:40","guid":{"rendered":"http:\/\/olduvai.ca\/?p=40490"},"modified":"2018-11-14T06:45:40","modified_gmt":"2018-11-14T11:45:40","slug":"a-worldwide-debt-default-is-a-real-possibility","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=40490","title":{"rendered":"A Worldwide Debt Default Is A Real Possibility"},"content":{"rendered":"
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A Worldwide Debt Default Is A Real Possibility<\/a><\/h3>\n<\/div>\n
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Getty<\/p>\n<\/div>\n<\/div>\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 yet.<\/p>\n

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

The problem is that many people, businesses, and governments borrow because they can. It\u2019s been possible in the last decade only because central banks made it so cheap.<\/p>\n

It was rational in that respect. But it is growing less so as the central banks start to tighten.<\/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. I dubbed it \u201cThe Great Reset.\u201d I estimated we have another year or two before the crisis becomes evident.<\/p>\n

Now I\u2019m having second thoughts. Recent events tell me the reckoning could be closer than I thought just a few months ago.<\/p>\n

Debt Doesn\u2019t Fuel Growth Anymore<\/strong><\/p>\n

Central banks enable debt because they think it will generate economic growth. Sometimes it does. The problem is they create debt with little regard for how it will be used.<\/p>\n

That\u2019s how we get artificial booms and subsequent busts. We are told not to worry about absolute debt levels so long as the economy is growing in line with them.<\/p>\n

That makes sense. A country with a larger GDP can carry more debt. But that is increasingly not what is happening.<\/p>\n

Let me give you two data points.<\/strong><\/em><\/u><\/p>\n

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

A Worldwide Debt Default Is A Real Possibility Getty 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 yet. Whether it\u2019s wise or not depends on what you buy. Debt to educate yourself so […]<\/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":[195,6847,8226],"class_list":["post-40490","post","type-post","status-publish","format-standard","hentry","category-economics","tag-debt","tag-debt-default","tag-john-mauldin"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/40490","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=40490"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/40490\/revisions"}],"predecessor-version":[{"id":40491,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/40490\/revisions\/40491"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=40490"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=40490"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=40490"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}