Commodity Trade Mantra

Posts Tagged ‘Expansion of Debt’

Financial Collapse Could be Farther and Faster Than Pundits Expect

Financial collapse isn’t “out of the blue,” any more than a heart attack is “out of the blue.” Recall that the global “recovery” 2009 – 2015 was entirely based on the expansion of debt taken on by marginal borrowers. Systemic fragility doesn’t respond to central bank jawboning or Keynesian claptrap; unlike those “policy tools,” fragility is real.

Here's Why the "Growth Dependent" Status Quo is Doomed

Status Quo only works in a world with plenty of room to expand. The real world has limits & so does the financial world of debt. When the world the Status Quo has been optimized to exploit can no longer expand, the Status Quo doesn’t just slow, it implodes. When incomes stop expanding, debt eventually stops expanding, which means growth stops expanding.

How Economies Collapse: Systemic Friction and Debt Are Self-Liquidating

Paying for unproductive friction with borrowed money has generated the illusion that piling up debt is risk-free as long as interest rates are low and the government backstops all the debt. The final illusion is that there is no mechanism to brake the expansion of debt: that the “solution” to rising interest costs is to borrow more money.

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