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And in other news, global debt now exceeds $100 Trillion dollars - up 40% over the last 7 years: http://www.bloomberg.com/news/2014-03-09/global-debt-exceeds-10

by grej 13y ago

And in other news, global debt now exceeds $100 Trillion dollars - up 40% over the last 7 years: http://www.bloomberg.com/news/2014-03-09/global-debt-exceeds-100-trillion-as-governments-binge-bis-says.html http://www.bloomberg.com/news/2014-03-09/global-debt-exceeds.... Which is the bigger Ponzi?

craigyk 13y ago
the system where you can help pay down the debt by printing money?
- skywhopper 13y ago
  Debt creates more money, so the existence of such a large amount of debt indicates that printing some more money would be a good idea, and that central banks and governments have failed to print enough money to power the economy at the rate it requires.
throwaway13qf85 13y ago
An increase of 40% in 7 years is about 4.9% per year, which isn't so terrible when you consider (i) that this period includes the largest financial crisis for fifty years (ii) inflation.
skywhopper 13y ago
Ponzi's not really the right word for either thing. The huge growth of debt is a sign that inflation has been too low for too long in too many places. As long as the ECB and the Fed treat 2% as scary-high inflation, paying back debt becomes far more difficult. To start solving the debt problem, the central banks should start targetting 4-5% inflation for a decade or so, and allow it to go a little above the target, rather than trying desperately to hold it down to less than 2%. This would reduce debt while encouraging investment and economic growth, which would bring down unemployment, which would help pay off debt. It's a virtuous cycle. In contrast, Bitcoin is a deflationary currency. Deflationary regimes favor hoarding, make it impossible to invest, and ultimately benefit only the wealthy. Reasonable levels of inflation on the other hand favor economic growth, investment in real assets, and they favor the productive working class over the idle rich.
- bru 13y ago
  >In contrast, Bitcoin is a deflationary currency This is IMHO the strongest argument against Bitcoin and the reason why a long-term economy could not depend on it. The problem with cryptocurrencies is the impossibility to control the monetary mass.
  - shawabawa3 13y ago
    > The problem with cryptocurrencies is the impossibility to control the monetary mass. Not really. It is designed so that no individual can control the rate of inflations, however if it is in the vast majority[1] of miner's interests it can be changed. [1] If a small majority of miners changed inflation it would cause a massive chain fork
- shawabawa3 13y ago
  > To start solving the debt problem, the central banks should start targetting 4-5% inflation for a decade or so, Wouldn't that just cause lenders to increase their interest rates? > Deflationary regimes favor hoarding, make it impossible to invest, Most sound investments yield returns way above inflation, and they would also yield returns way above deflation > and ultimately benefit only the wealthy Unlike the current system?
  - hnnewguy 13y ago
    >Wouldn't that just cause lenders to increase their interest rates? Yes it would. Only unexpected inflation will affect debt repayment rates (in theory).
- vinceguidry 13y ago
  Bitcoin may itself be deflationary but the problem that presents is being solved by alt-coins. Eventually the crypto-currency ecosystem will iron out the wrinkles, and Bitcoin itself will start to shed some of its bubble-esque valuation as it gets easier to use other crypto-currencies for the same purpose. People are thinking in terms of the solution rather than in terms of the problem. You shouldn't think of Bitcoin as a thing, Litecoin as a thing, Dogecoin as a thing, and weigh each of these things on their own merits. Instead they're all just competing solutions to the same basic problem. As problems with Bitcoin surface, the market will gravitate towards other currencies, and the infrastructure will gradually grow to accommodate them so as to provide the same level of services. It's still a fantastic time to get into crypto-currency. Don't feel like you missed out just because you didn't buy thousands of BTC 2 years ago and saved it till today. The rough and rowdy prospectors are just now giving way to the frontier businessmen, but there's still lots of time and stuff to do until the big players emerge and start wrapping the markets up.
pessimizer 13y ago
>Which is the bigger Ponzi? Who cares? It isn't a contest.
hnnewguy 13y ago
>And in other news, global debt now exceeds $100 Trillion dollars So, what are global assets worth, then? Why only talk about one side of the ledger? Debt doesn't exist in a vacuum.

by grej 13y ago

craigyk 13y ago

the system where you can help pay down the debt by printing money?

skywhopper 13y ago
Debt creates more money, so the existence of such a large amount of debt indicates that printing some more money would be a good idea, and that central banks and governments have failed to print enough money to power the economy at the rate it requires.

throwaway13qf85 13y ago

An increase of 40% in 7 years is about 4.9% per year, which isn't so terrible when you consider (i) that this period includes the largest financial crisis for fifty years (ii) inflation.

skywhopper 13y ago

Ponzi's not really the right word for either thing. The huge growth of debt is a sign that inflation has been too low for too long in too many places. As long as the ECB and the Fed treat 2% as scary-high inflation, paying back debt becomes far more difficult. To start solving the debt problem, the central banks should start targetting 4-5% inflation for a decade or so, and allow it to go a little above the target, rather than trying desperately to hold it down to less than 2%. This would reduce debt while encouraging investment and economic growth, which would bring down unemployment, which would help pay off debt. It's a virtuous cycle. In contrast, Bitcoin is a deflationary currency. Deflationary regimes favor hoarding, make it impossible to invest, and ultimately benefit only the wealthy. Reasonable levels of inflation on the other hand favor economic growth, investment in real assets, and they favor the productive working class over the idle rich.

bru 13y ago
>In contrast, Bitcoin is a deflationary currency This is IMHO the strongest argument against Bitcoin and the reason why a long-term economy could not depend on it. The problem with cryptocurrencies is the impossibility to control the monetary mass.
- shawabawa3 13y ago
  > The problem with cryptocurrencies is the impossibility to control the monetary mass. Not really. It is designed so that no individual can control the rate of inflations, however if it is in the vast majority[1] of miner's interests it can be changed. [1] If a small majority of miners changed inflation it would cause a massive chain fork
shawabawa3 13y ago
> To start solving the debt problem, the central banks should start targetting 4-5% inflation for a decade or so, Wouldn't that just cause lenders to increase their interest rates? > Deflationary regimes favor hoarding, make it impossible to invest, Most sound investments yield returns way above inflation, and they would also yield returns way above deflation > and ultimately benefit only the wealthy Unlike the current system?
- hnnewguy 13y ago
  >Wouldn't that just cause lenders to increase their interest rates? Yes it would. Only unexpected inflation will affect debt repayment rates (in theory).
vinceguidry 13y ago
Bitcoin may itself be deflationary but the problem that presents is being solved by alt-coins. Eventually the crypto-currency ecosystem will iron out the wrinkles, and Bitcoin itself will start to shed some of its bubble-esque valuation as it gets easier to use other crypto-currencies for the same purpose. People are thinking in terms of the solution rather than in terms of the problem. You shouldn't think of Bitcoin as a thing, Litecoin as a thing, Dogecoin as a thing, and weigh each of these things on their own merits. Instead they're all just competing solutions to the same basic problem. As problems with Bitcoin surface, the market will gravitate towards other currencies, and the infrastructure will gradually grow to accommodate them so as to provide the same level of services. It's still a fantastic time to get into crypto-currency. Don't feel like you missed out just because you didn't buy thousands of BTC 2 years ago and saved it till today. The rough and rowdy prospectors are just now giving way to the frontier businessmen, but there's still lots of time and stuff to do until the big players emerge and start wrapping the markets up.

pessimizer 13y ago

>Which is the bigger Ponzi? Who cares? It isn't a contest.

hnnewguy 13y ago

>And in other news, global debt now exceeds $100 Trillion dollars So, what are global assets worth, then? Why only talk about one side of the ledger? Debt doesn't exist in a vacuum.