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The World Debt Cycle and Nation Debt by Country

By Dan8267   Follow   Sun, 8 Jul 2012, 11:54am   1,778 views   15 comments
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1. zzyzzx Follow Befriend (9) 436 threads 4,261 comments Baltimore, MD

   1   9:59am Mon 9 Jul 2012   Share   Quote   Permalink   Like   Dislike   What's the % for Greece?

2. T Follow Befriend 28 comments

   2   10:56am Mon 9 Jul 2012   Share   Quote   Permalink   Like   Dislike   So if all the industrial countries are losing money, who's doing the profiting or is the economy just unsustainable with modernized culture?

3. Randy H Follow Befriend (5) 44 threads 4,602 comments Los Altos, CA Premium

   3   3:21pm Mon 9 Jul 2012   Share   Quote   Permalink   Like   Dislike   All the countries "in the black" are so because *THEY DEFAULTED*! It's not hard to be "in the black" when the IMF pays off your loans for you. Or, have we forgotten about the lessons of Russia so quickly already?

4. Dan8267 Follow Befriend (17) 785 threads 7,970 comments Boca Raton, FL Premium

   4   7:48pm Mon 9 Jul 2012   Share   Quote   Permalink   Like   Dislike   Randy H says All the countries "in the black" are so because *THEY DEFAULTED* Cool. America is going to be in the black soon!

5. tdeloco Follow Befriend (2) 11 threads 218 comments San Jose, CA

   5   11:16pm Mon 9 Jul 2012   Share   Quote   Permalink   Like   Dislike   Randy H says All the countries "in the black" are so because *THEY DEFAULTED*! It's not hard to be "in the black" when the IMF pays off your loans for you. Or, have we forgotten about the lessons of Russia so quickly already? Argentina defaulted in 2001. How come they're pink again? Also, only $8.7T for the U.S.??? I thought it's $15.892T (at the time of this writing).

6. zzyzzx Follow Befriend (9) 436 threads 4,261 comments Baltimore, MD

   6   6:57am Tue 10 Jul 2012   Share   Quote   Permalink   Like   Dislike   tdeloco says Also, only $8.7T for the U.S.??? I thought it's $15.892T (at the time of this writing). The map must be the pre-Obama version

7. Vicente Follow Befriend (8) 209 threads 4,521 comments Davis, CA

   7   7:05am Tue 10 Jul 2012   Share   Quote   Permalink   Like   Dislike   It certainly should put perspective on the Chicken Littles. It won't, but it should.

8. Randy H Follow Befriend (5) 44 threads 4,602 comments Los Altos, CA Premium

   8   7:12am Tue 10 Jul 2012   Share   Quote   Permalink   Like   Dislike   There are discrepancies in how the varying countries do their GDP accounting. I believe this view has taken a conservative approach to harmonizing those discrepancies. Though it's quite popular these days to proclaim with smug chin how glorious the demise of the US will be, you'd be very surprised to find how strong the US remains in relative terms. The simplest example of this would be comparing the above between the UK and US. The UK adds mortgage debt and rent equivalents (as in people's average rent payments) to their "savings rate". That has the effect of lowering their debt-to-GDP by a massive amount. Most economists believe, if measured the same as the US, they'd be over 200% of GDP in debt. Ireland, which does similar things, would be at nearly 400%. In the end, default is rather unrelated to all this anyway. Default is a geo-political event with economic ramifications, not the other way around. The Soviet Union never defaulted even though they were operating at thousands of percent debt-to-GDP by the end. (Actually, Russia never technically defaulted either, to correct my earlier statement; they simply "restructured").

9. bob2356 Follow Befriend 3 threads 2,564 comments

   9   11:46am Tue 10 Jul 2012   Share   Quote   Permalink   Like   Dislike   Randy H says The Soviet Union never defaulted even though they were operating at thousands of percent debt-to-GDP by the end. (Actually, Russia never technically defaulted either, to correct my earlier statement; they simply "restructured"). That's not true, they were no where near thousands of percent. The gdp in the soviet union was 2.6 trillion with a debt of 41 billion in 1989 when the berlin wall fell as per CIA world fact book. The debt climbed to 120 billion by 1996 when the soviet union dissolved and russia took the debt over. The trouble was russia assumed the entire debt of the soviet union which was difficult to service at the time of the transition. Russia did default on domestic debt in 1998, but not foreign debt.

10. Randy H Follow Befriend (5) 44 threads 4,602 comments Los Altos, CA Premium

    10   2:29pm Tue 10 Jul 2012   Share   Quote   Permalink   Like   Dislike   True that Russia defaulted on domestic notes in 98. The 89 current accounts numbers are distorted for the same reasons stated earlier. USSR GDP accounting of the time makes that of China today look clean and transparent. If I'm not mistaken, the CIA also estimated the USSR incurred nearly double the 41bn openly reported during the Afghanistan period alone in net debt. If domestic default is the determination of "default", then we'll need to add about 1/3 of the world to the "have defaulted" list, btw. Generally we're referring to failure to service foreign debts in these discussions because that is the factor that contributes to borrowing rates, devaluation and high inflation. Internal defaults can actually be part of a planned austerity policy; a common approach taken to burning off entitlement overhangs.

11. futuresmc Follow Befriend (1) 1 threads 400 comments Buffalo, NY

    11   2:54pm Tue 10 Jul 2012   Share   Quote   Permalink   Like   Dislike   Randy H says Default is a geo-political event with economic ramifications, not the other way around. Amen Brother. This is why I roll my eyes at the whole deflation vs. high-inflation/hyperinflation debate. Politics and the powerful men behind it control markets, and part of that control includes the success or failure of any given nation to pay its debts. If the market were allowed to choose winners and loosers, I'd take the issue seriously, but never in human history has a government taken its hands off the wheel and just let the invisible hand drive. Those with power always compel our leaders to interfere and they don't give fair warning. Predicting default or growth is useless. If default serves the geopolitical victors, be they banks or states, it will happen. If not, it won't. Only random, wholey unpredictable (even by the most advanced computers and genius minds) events or acts of nature can change that.

12. Randy H Follow Befriend (5) 44 threads 4,602 comments Los Altos, CA Premium

    12   3:02pm Tue 10 Jul 2012   Share   Quote   Permalink   Like   Dislike   In the long-run, we are all dead, as someone much smarter than I once said. I know that eventually all nation states will fail, all economic systems will falter, all empires will crumble, even all religions will fade into mythology. The trouble is no one can predict how long any of those events will take to play out nor are any of us liquid enough to place profitable bets to that accord. If you happen to call one of these "ends of the world" then you're simply lucky, not shrewd.

13. Dan8267 Follow Befriend (17) 785 threads 7,970 comments Boca Raton, FL Premium

    13   7:43pm Tue 10 Jul 2012   Share   Quote   Permalink   Like   Dislike   Randy H says In the long-run, we are all dead That line won't get you laid.

14. everything Follow Befriend (2) 3 threads 565 comments Madison, WI

    14   8:31pm Tue 10 Jul 2012   Share   Quote   Permalink   Like   Dislike   Obviously sustainable, the solution to debt is more debt, pile it on.

15. tdeloco Follow Befriend (2) 11 threads 218 comments San Jose, CA

    15   9:52am Wed 11 Jul 2012   Share   Quote   Permalink   Like   Dislike   Randy H says In the long-run, we are all dead If you always keep thinking in terms of the grand scheme of things, then nothing really matters. For the rest of us who live at the present, things matter. A 20% movement in home prices matter. My company laying off 10% matters. Otherwise, why bother with anything? futuresmc says Politics and the powerful men behind it control markets, and part of that control includes the success or failure of any given nation to pay its debts True. And these politicians will save the rich at the expense of ordinary folks. Isn't that an even bigger incentive to pay attention? I'm neither rich nor well-connected. We're not talking about armageddon... just a repetition of history. And, yeah, predicting timing is next to impossible. Randy H says If domestic default is the determination of "default", then we'll need to add about 1/3 of the world to the "have defaulted" list, btw Yes, it's far more common than people think. The aftermath in each instance is pretty much the same. Furthermore, many countries did other things (such as printing money) to avoid a "default", and they ended up experiencing the same symptoms. So I believe there is such a thing as a defacto-default.