The International Monetary Fund criticizes the debt behaviour of the major economies. The big three - the USA, China and India - are expected to continue to fuel the global debt spiral by over 7% net new debt in the coming year. The numerous geopolitical crises will come at just the right time to pour new credit, i.e. new oil on the fire. However, the legislators will decide who has to take on the new debt. It is a foregone conclusion that the 'little man' will have to pay for this Keynesian debt orgy in the form of price increases!
I think the only way to look at these kinds of headlines now is as a disclosure operation.
[They] have known for decades the fiat ponzi was going to blow up some time in the 2020's. No conspiracy theories required, it's math and demographics data that have been out in the open if you paid any attention to global macro and weren't thrown off the scent by gaslighting.
Now, headline after headline for all to see, capitulation via disclosure to the broadest possible audience that we're in the final innings. When the restructuring comes, no one can say they were surprised, and a flood of I told you so's for those that do.
Gradually is the foaming of the runway, the suddenly is touch-down.
Bitcoin has been a genius operation in this context, an unstoppable check against a CBDC response to crisis, and by dragging it out for a long time it more fairly distributes the unavoidable bag holding. To that end, the productive class gets an advantage in accumulation, while information asymmetry and game theory punishes the dumb capital that's been benefiting from the Cantillon effect under the old system. Game theory keeps pace socially with the ever-accelerating debt spiral.
Without it, the end of the dollar hegemon would be far more messy, and a major natsec issue for the US. Instead, it's foot on the accelerator just in time for another fake election. What a coincidence.
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Something that has interested me recently is China's debt issue. I know the US is bad but China keep having to slap bandaids on everything from companies to their local governments who are failing. China doesn't want the image of failure though and seems to be buying a ton of terrible terrible bond/assets to bail these companies out while dealing with a population cliff and people leaving the country.
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The Chinese certainly have an even bigger debt problem than the Europeans and the Americans. In addition, there is the demographic catastrophe, which they are already at the beginning of and which will exert such extreme deflationary forces that the fiat money system in China will suffer massively before others fall into this trap.
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Not defending their actions, but are they truly at risk? They've been buying up gold, investing in nuclear reactors, produce almost the entire world's supply of bitcoin mining equipment, heavily investing in AI and automation, and currently have an overcapacity in their manufacturing sector.
If they let their fiat system collapse and they continue working on their "BRICS currency" I don't see how deflation is an issue for them. The government wouldn't necessarily need fiat if they can control the communications networks and all hardware connected to them to force people to use surveilled e-cash wallets on a fedimint for example.
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Yes they are at risk by the sheer issue of not having a population. Population cliffs have killed major economies in the past and they will in the future. Buying up gold is all fine and dandy but gold is also heavy and takes up a ton of space so it isn't like you can trade with it all that well. What made gold shine was having a fiat conversion rate so they need either fiat to be strong or the gold only does so much.
With their nuclear fleet, they are building the types of reactors (salt-cooled) that the US messed with in the 60s and 70s. They work they are solid options but they have considerable drawbacks hence the reason we never saw them take over all those years ago. China is also still pumping out coal plants like its no tomorrow as well because certain regions of their economy rely on coal. SMR tech and more importantly fusion technology is what matters the most and the Chinese are incredibly behind in fusion.
So their AI is well extremely poor for worldwide adoption. It is only really good for ethnic and that is a huge huge problem to fix something that the rest of the world is focusing on while they aren't. Within AI they are still lightyears behind in making the most cutting-edge chips they can make the basic ones but the ones everyone wants their hands on they don't have the slightest ability to manufacture or get the tech to manufacture the cutting-edge ones.
China is huge on subsizing these industries as well to keep them afloat and move them forward and that only works if you can stop. When they have tried to stop they have run into huge issues so they can't. Overcapacity in manufacturing is also due to a lot of manufacturing from places like the US moving or expanding in other countries like India and Thailand. It isn't from being so good or being able to out produce rather its a lack of investment or reinvestment.
A prime example of this is China's EV fleet is "enormous" however what a lot of people do not know is that they "retire" the cars after a few months maybe a couple of years and there are huge car lots with practically brand new vehicles that just sit there. It allows the companies and country to say they are producing and purchasing all of these EVs but they do not use them at all.
BRICS itself is going to have issues in the future. China and India cannot decide on a border and have already had wars over it in the past. More recently they have had soldiers beating the other side to death with baseball bats with spikes so that is going to cause a split (India won't want China to have all the power) and Russia is burning through gold reserves as well as having transitioned their economy to a war based economy. Say they win Ukraine they face a huge issue with producing things they do not need anymore. Their economy is dependent on war to keep it functioning.
The long and short of it is China is building debt at a rate that makes the US look slow and they have no end in sight. Facing a population collapse means you can't pay it back due to your economy often shrinking (look at Japan for a comparison) and you run into economic dysfunction. China looks a lot better and put together than they are even their armed forces have had recent public embarrassments like the rockets being fueled with water and not actual fuel to shoot them.
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I believe that the demographic collapse of Chinese society presents us with sociological and economic, but also psychodynamic challenges and complex questions that we cannot even begin to comprehend at this point, let alone answer. It is clear that this transition can have dramatic consequences for all established social and economic systems in a society. We will observe this closely in order to be able to draw conclusions for our societies.
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Yeah if we look at the historical perspective it doesn't end well and you can see they are trying to get ahead of this and by themselves more time to prevent a collapse but time is fickle esp. if they jump into a war with Taiwan would lead to an enormous human capital toll that China cannot spare or you run into the issues Russia is running into now with ethnic Russians getting decimated so they are sending minorities into the meat grinder instead.
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Yeah I know they have made and continue to make moves in Africa and other countries with the Belt and Road but it seems like a poor idea. A year or so ago there was a huge recurrent push by China to get immigrants from Africa but then it came out how racist mainland China was towards non-Han Chinese and it seemed to kill that idea by the CCP
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Im just curious, what would happen if the USA started paying off its debt?
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Demand for the dollar would go through the roof.
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There's a paradox with this, since dollars are themselves a debt note, the cascading defaults that result would make remaining dollars worthless.
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And now try explain this to the fiat world normies that are staring at the banks and governments to solve their problems
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Most people can't be told anything, they have to be shown, that's how psyops work...
But at this point so much has been stolen from people that if they ever get a small rebate back they'll call it a W and return contently to their frivolities.
I expect unprecedented stimmies as the spiral picks up for this reason.
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So You mean: 'BTC stimmies' for us with a functioning brain cell??
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Effectively, that's the genius of BTC... productive allocators benefit over passive consumers
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Sounds good to me...
Yeah, there's a bit of a gap between the first order and second order effects, isn't there?
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Yea, the system is so complex that the line between points A and B has unpredictable turns, otherwise we could all just lever up and await Valhalla.
Best example is the fake pandemic. That had to happen to kick the monetary can for an election cycle, enabling trillions to be injected into the system to keep things solvent, all while constricting monetary velocity by shutting the economy down to slow the currency bleed.
What had to happen before they could do that? Conditions so tight we dropped to 3k before the rip to 60k.
Rough seas ahead...
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Don't worry about this one....
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never going to happen? lol
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India said the International Monetary Fund's projection of the general government debt exceeding 100 per cent of the country's GDP by 2027-28 is “misconstrued”. The finance ministry said that several other countries are expected to perform worse than India on the debt front. The data about India is incorrect definitely.
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Experience shows that debt is also likely to grow faster as no projection includes a deeper and longer recession.
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