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The trouble is when nominal value shrinks, it shackles people to endless cycles of debt slavery. Either that or people default, which causes follow-on cascades
by api 12y ago
The trouble is when nominal value shrinks, it shackles people to endless cycles of debt slavery. Either that or people default, which causes follow-on cascades of defaults.
If we had a low-debt cash-only economy this might not be the case, but our economy is so far from that it's not even worth talking about. We are absolutely a credit economy, and when the numbers get smaller in a credit economy pretty much everything breaks.
Eventually the collapse of the middle class will drag down everything else, including the rich.
- Amezarak 12y agoFWIW, the US is actually doing a great job of deleveraging its private debt, especially relative to other countries. http://www.mckinsey.com/insights/global_capital_markets/uneven_progress_on_the_path_to_growth http://www.mckinsey.com/insights/global_capital_markets/unev...
- api 12y agoAs with most things, it could be worse. But the overall picture -- especially of wages vs. asset prices -- is not exactly good.