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Very few countries want to trade in the currencies of Russia or China. But that's besides my point. Getting resources and manufactured goods has nothing to do
by exclusiv 3y ago
Very few countries want to trade in the currencies of Russia or China. But that's besides my point.
Getting resources and manufactured goods has nothing to do with my statement about sustainability.
Debt to GDP of 338% is not sustainable [1]. It doesn't matter if countries can get resources and manufactured goods. That's like saying - well I have 3X my salary in debt but it's ok... I can buy goods on Amazon.... on more credit, with a higher rate... and still be fine. No you can't.
There's about 20 trillion in US denominated debt / eurodollar debt [2] and 65 trillion in unrecorded debt overseas [2].
In order to service US denominated debt, you have to swap your currency to get USD. This is a major problem when you already need to keep printing to service your own unsustainable debt (> 300% debt to gdp), inflation rips on goods and materials you need and tax revenues drop in an economic downturn.
When interest rates go up, it squeezes you. Everyone kept rolling debt over in a debt drunk binge fest for decades as it kept getting cheaper and they have been feeling major pain from it going the other way.
[1] https://www.weforum.org/agenda/2023/02/global-debt-2022-and-other-economy-stories-february-2023/#:~:text=The%20ratio%20of%20global%20debt,points%20to%20250%25%20of%20GDP https://www.weforum.org/agenda/2023/02/global-debt-2022-and-....
[2] https://www.bruegel.org/comment/euro-dollar-parity-beyond-symbolism https://www.bruegel.org/comment/euro-dollar-parity-beyond-sy...
[3] https://www.weforum.org/agenda/2023/01/65-trillion-debt-bank-financial-system-economic/ https://www.weforum.org/agenda/2023/01/65-trillion-debt-bank...