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MD
Monday Dayton
@mondaydayton · Sep 20

Total world debt has reached a record high of $307 trillion.

This news jumped out at me and although it is not stock specific information, I would say that it is an interesting, unfortunately alarming number that may affect economies around the world and subsequently the markets. I'm going to ask questions at the beginning of today ...

How do you view the financial system? ...where I would say, since the abandonment of the gold standard, where the currency was, had to be backed by gold, has gone away and today new money is being created by debt. 🤔 It's a complex, philosophical topic and nobody knows the solution, but I'm interested in opinions, or do you see this as a threat to the stock market? ...

The stock of global debt rose by $10 trillion in the first half of 2023, reaching a new record high of $307 trillion, according to a report by the Institute of International Finance. The high interest rate environment experienced in most economies has sent this figure to dizzying heights, with current debt $100 trillion higher than a decade ago.

DD
Daniela Duong @danieladuong Sep 22

The debt is mega huge,sub me does it have to "burst" the debt bubble at some point or is it some peaceful solution?

MD
Monday Dayton @mondaydayton Sep 22

It does, I don't know how but I don't think it's going to be peaceful, it's just going to depreciate and just on this as I say to people who are blind to investing, invest. Fortunately, we all understand here that having money in a drawer or in a traditional account is a mistake. 😊

BC
Bill Combs @billcombs Sep 22

It's a hell of a debt. But I'm guessing it's gonna get swept under the rug somehow.

AG
Alfred Gray @alfredgray Sep 20

The debt is absolutely insane, I can't imagine the possibilities of a solution...

MD
Monday Dayton @mondaydayton Sep 21

That makes two of us.

CB
Clifford Barclay @cliffordbarclay Sep 20

Debt incurred is an oversimplification even if it is true. They are created by the need for economic growth to be financed by something, thus creating the need to incur debt, and therefore it is possible to support growth by "printing money" (and vice versa by making it more expensive) Growth is desirable in principle but must be managed somehow to be sustainable. There are a lot of hooks, but I think the principle is right. How the modern economy manages this process quite well is, I think, evident in the Fed's actions. Sorry for the oversimplification for those interested in the details- the Austrian school as @tomaskunovsky writes is the basis, but I would add sustainable growth theory.

MD
Monday Dayton @mondaydayton Sep 21

I understand that debt will support economic growth, because yes, it has to be financed somehow. On the other hand, a lot of debt is sort of forgiven, forgotten, because in a time when this is being done and lending to almost everybody, a lot of it disappears and nobody sees the money back. Or maybe what I would try to do is to somehow police more, regulate more or I don't know ...so yes, you need to produce, export etc ...but in a sensible way, just according to demand. But sometimes when you see how many things are produced just to meet some standards but then it ends up in warehouses, depots etc ...I'm just referring a bit to the car companies, how many new cars never go out to the customer ... Otherwise, yes, the Fed has the tools and it does tighten well, I agree, rather then I would not loosen so much, in times of low inflation, but that brings me back to the beginning again, well ... As for the Austrian School, I'll have to look that up, or see if anyone can share it, there I'm missing specifically what it is...🤦‍♂️

MS
Mikey Stone @mikeystone Sep 20

It usually ends in hyperinflation. The solution is the Austrian School.

MD
Monday Dayton @mondaydayton Sep 21

I confess that I have no idea what the "Austrian School" is?🤦‍♂️ Feel free to elaborate a bit, I'll be glad to be in the know.