WTF does debt even mean when talking about countries?
If a person in debt, that's considered bad.
Yet all the states that are hugely in debt are the ones where you'd want to live - not some third world shit-holes.
bloomberg.com
Also, who are they indebted to? Banks? How can banks even have so much money to finance all the first world countries?
WTF is going on here?
Other urls found in this thread:
you would want to live in a poor country with money income from a rich country. Thats little different than being born there and be a poorfag your whole life.
I didn't ask for advice how to live.
I asked what is going on here? How can basically the whole of mankind (via governments) be in debt, and who they are indebted to?
>private individual is in personal debt
They're paying for something that they can't afford outright. Whether this is a good thing or not comes down to a lot of late nights going over budgets and numbers and the apple cart can be easily tilted even if they're doing everything right.
>private company takes on debt
They are utilizing financial instruments to pursue profit. Even if it goes wrong the company can fold or restructure without passing on that debt to its owners. Nothing is risked that isn't ventured, it's purely strategic.
>State entity goes into debt
Questions of fiscal and monetary policy are so abstract that unless you have a thorough understanding of economics and finance, politics, and international relations it is basically indecipherable.
>Questions of fiscal and monetary policy are so abstract that unless you have a thorough understanding of economics and finance, politics, and international relations it is basically indecipherable.
That's what I would have guessed.
Like what would happen if the USA said, alright, our debt is 0 now. We are not paying shit back.
Who would come and collect the debt. Fucking nobody, right?
No, that would result in a global financial meltdown.
it's what Jews lend themselves on your behalf.
It's mostly your future pension money & current savings. Some foreign debt too, but less than people think.
The government issues debt notes & other instruments when it needs money to fund its activities (ie. basically it is living beyond its means.)
The majority of those notes (in terms of value) are purchased by institutional investors, the largest of which are pension funds, banks, asset funds, etc.
So, to put it in very basic terms, you earn money at work, instead of spending that money or investing it yourself, the government strongly encourages you to give it to your 401k or bank to manage for you.
Then those places "invest" in the government with the promise of a higher return.
Unfortunately, there will be no return, and after the pyramid collapses the money that will gone is at the end your 401k, & anything you hold with banks or other similar institutions.
People better off:
- The Gov. (gets free money),
- The bankers & fund managers (get bonuses & under-the-table bribes for giving away your money)
People worse off:
- You
Could you explain how? I like learning
Yeah not worth explaining to you, that's the thought process of a 12 year old.
Governments borrow money for public works and such when tax doesn't cover their expenses.
They can borrow from other nations or print it. If they print it, they will experience one of two kinds of inflation.
High end inflation, where luxury goods and income earning assets (houses/stock) will skyrocket in value.
Or
Low end inflation, this is the dangerous kind where bread costs 2Million dollars. At the moment the huge debt countries are in is being solved partly by printing money. This printing of money has caused massive high end inflation and near 0 low end inflation.
Countries like Greece can't print their own currency because they don't have one, therefore their debt can't be printed away. They can only solve it by actually saving money. When governments try to 'save' money it's called austerity and people starve and die as a result.
The problem with high end inflation is it causes political unrest. Anyone that owns a decent amount of their money in Stock hit the jackpot over the last few years. I mean people with 1-2M stock portfolios, literally made another 1-2M in real wealth in terms of shoes, socks, budget cars, and cheap housing.
Why? Because while stock and rolexs did inflate, banannas and toyotas didn't.
So the rich got a LOT richer relative to the poor, and this causes inequality. There is no free meal, and eventually this kind of high end inflation causes problems.
I'm going to simplify some things. The big picture is actually pretty complicated, but we're going to make it simple for the sake of making it easy to explain. I might be glossing over some things or turning several things into one thing, or ignoring some nuance, but you'll have a functional if somewhat inaccurate picture of how it kind of works.
Imagine the international economy as a big interconnected machine with a lot of parts. Those parts are various national economies and banking structures. Those parts are mode up of lots of little parts, which represent various central banking systems, monetary systems, and economies built on those banking and monetary systems.
Now those parts keep functioning because the gears keep turning. They turn because they are solvent. Governments can circulate debt, print currency, create currency (distinct from printing it), and regulate banking in order to keep the money supply from breaking while private banks are able to circulate money and debt, and the economy can keep on turning based on what keeps it running. Each of those things keeps the gears turning and the gears need different things at different times.
So the US economy and its central bank are a very important piece of the machine. If it suddenly said that it wasn't going to pay its debts then it couldn't go into debt anymore. The machine would break down because it was no longer solvent and some of the gears wouldn't turn anymore. That would be catastrophic for the whole machine, and so it simply isn't done.
Now you have some people who are basically bad actors, knowingly or not. They want the machine to break down, or they just despise some byproduct of the machine without really understanding that it has a function. The adults in the room are constantly stopping these people from blowing the whole thing up, but they never stop trying.
>The adults in the room are constantly stopping these people from blowing the whole thing up, but they never stop trying.
somehow people lived and whole civilizations thrived before the concept of a bank and debt
stop trying to justify the current system just by saying
>it works
Yeah it works. It does it's job pretty well. To make 99.9% of people work their ass in order to generate obscene wealth for 0.01% of people.But hey, if you work hard enough you could become one of the 0.01%, right, right?
Banking and debt have been around for as long as merchants have. Merchants have been around since before history. We have evidence of large and complex trade routes that pre-date ancient Sumeria.
>some fucking Commie mumbo-jumbo
If you're a kid you'll outgrow this and just consider it an embarrassing phase like I did. If you're a grown ass adult spewing this then I really hope you get your shit together at some point.
Fucking Based
You generally have the right idea.
There are 3 types of people that will respond to you,
1)people who do not benefit from the system (about 99%), they will generally agree with your conclusion.
2)people who benefit from the system, they will shit on any argument of yours, no matter how much it makes sense, because it is in their interest to keep the system going
3)people who hope to benefit from the system in the future; they will also shit on you because basically they are the asslickers of the ones who already benefit from it, and think that by playing the game & sucking up they will "make it".
Beware, this being /biz, you will find an unusually high % of people from the 3rd category.
>WTF does debt even mean when talking about countries?
jews
China would stop producing cheap shit for murricans, so would Mexico too.
And in few decades, China might actually come to collect its monies. At which point fed could just print the money as the debt is in dollars but anyways...
it basicly all boils down to money printing by greedy keynesian kikes and will result in hyper inflation at some point down the line sooner or later.
are you unironically a teenager?
>>some fucking Commie mumbo-jumbo
>are you unironically a teenager?
no, but I have been one and thought like that
then I became like you and defended the system, that shits all over us
now I'm back at being a teenager while being over 35
you would die from cannibals niggers or starvation
Man, I remember back when I marched in Occupy Wallstreet. Our intentions were basically good and the world was essentially burning down around us as a consequence of the financial meltdown, but fuck if we weren't naive.
You made it to 35 and you unironically don't comprehend what would happen if the US defaulted on its debts?
youtube.com
watch this
if some indonesian who is burping and eating while giving an interview can figure it out, maybe you all can too
>precious metals
>stable alternative to fiat
Charles de Gaulle and Richard Nixon would like a word with you.
It's just another big ponzi like stocks, crypto and whatnot. Money is a meme, buy low, sell high and that's all you need to know.
It's because the countries yoy'd want to live in are trusted. In the same way a reliable individual can take on more debt for lower rates, so can the first world states. The USA can print it's own currency, meaning your loan will (almost) always be paid back. The risk of inflation is known, and is taken into account.
Having a reserve currency basically means you can trade IOUs (that'll lose value thanks to inflation as inflation favors the debtor) for actual things. Very beneficial.
buddy this is a 30 years old boomer message board
do you seriously think we can't see through you?
i've been on the internet since the 90s, and i've seen literally thousands of first year uni students repeating the same junk they learned in econ 101, in the same manner of speech, with the same overfocus on appearing superior, the same form mistakes (on imageboards that'd be linebreaks and punctuation), the same emotional overposting to "win the argument", the same allusions to past events that happened when you were in middle school because you think it gives you credibility
picture a 12 years old boy trying to act like he's getting laid regularly. think how transparent and ridiculous that looks to you
now consider you look exactly the same to any of us who unironically have to shave their nose hairs, and we are many
i know your first instinct will be to double down, but ask yourself why do you need to make a fool of yourself on an anonymous venue. you're just an id, forgotten after this thread, there's no witness to whatever "shame" you feel. there's no shame in being misguided either, only in remaining so because you let your ego get in the way of learning
lighten up user, girls will like you more
The whole system is basically a scam to move money from the poor to the rich.
based. actually a very good and digestible explanation
>he actually took the time to write this for a 15 year old zoomer on an anonymous Indian waste management forum
I'm about 94% sure that was pasta.
kek
National debt is created when a government issues a bond. Someone who buys that bond is basically lending the government the numerical value of the bond, with the expectation of being paid that back plus a little extra (the amount varies) once the term of the bond is up. So basically one hundred dollars lent to the government today means that the government will, for example, give you one hundred and one dollars in a year's time. Where does that one dollar come from? In practice, that one dollar comes from it being printed (created) by the government. You would think that causes inflation, and it would if the economy didn't grow, but as long as the economy continues to expand, money can be printed to pay off government bonds more or less indefinitely because the dilution of the monetary supply by putting in that new printed dollar is offset by a larger economy. The problem is that when the economy doesn't expand, then you're diluting the value of your money and then you get too much inflation.
Ironically the best post - We're in the same position now - We have our current system, which is not ideal or utopian, but it's the best we currently know with our limited ability to extrapolate and predict future complex causality, limited technology, and more importantly compensating for the crutch of basic human irrationality.
This is both an argument for and against our current system - It's imperfect, has shitty byproducts, but so does evolution itself - the single best proven system for incremental improvement in complex environments far more complex than economy for billions of years. It's more a statement about human development than a statement on our system being shitty - This system is the best we know to implement at our current stage.
Sorry i'm drunk just don't read any of that