Who do we owe?

Hey there,

This is my first time jumping into the econ threads, and honestly, I’ll be the first to admit—I don't know much about this stuff. It’s pretty much all Greek to me.
So, I was scrolling through some news on CNN (yeah, yeah, I know, it can be a total circus), and they were talking about how Japan’s national debt is sitting at 200% of their GDP. We just saw all that chaos unfold in the USA because of massive debt levels, and let's face it—half of Europe, including us, is basically living in a state of debt slavery right now.

My big question is: who actually owns all this debt? Which institutions are we beholden to? And who really holds the keys to the kingdom when it comes to ownership?

Not gonna beat around the bush here, just calling it what it is: a criminal organization.

Nonsense...
We owe money to foreign banks, their local branches here in the States, and international investors ranging anywhere from Goldman Sachs to major pension funds..

Anyone claiming we’re indebted to criminal organizations is acting like someone who wanders into a dive bar, gets hammered, and then—when the bartender brings the tab at 3 AM—has the audacity to ask, "Why are you even charging me? You're just the guy who brought me drinks every time I raised my hand."

Hannah Alvarez2 said:Hey there,

This is my first time jumping into the econ threads, and honestly, I’ll be the first to admit—I don't know much about this stuff. It’s pretty much all Greek to me.
So, I was scrolling through some news on CNN (yeah, yeah, I know, it can be a total circus), and they were talking about how Japan’s national debt is sitting at 200% of their GDP. We just saw all that chaos unfold in the USA because of massive debt levels, and let's face it—half of Europe, including us, is basically living in a state of debt slavery right now.

My big question is: who actually owns all this debt? Which institutions are we beholden to? And who really holds the keys to the kingdom when it comes to ownership?

Are you talking about public debt? Well, it belongs to whoever buys it—which ranges from millions of small-scale investors through bond funds and banks, all the way up to the massive institutional players.

Sure, Japan has a high level of external debt, but they stay on top of their payments quite consistently.

It’s easy to get spooked by those massive numbers, but generally speaking, a country's citizens' financial assets will outweigh its total external debt.

You could look at it like this: maybe 40% of people are savers, while the other 60% are either breaking even or living on credit. That 60%, plus the government, effectively owes money to the savers.

Harold Martin10 said:Are you talking about public debt? Well, it belongs to whoever buys it—which ranges from millions of small-scale investors through bond funds and banks, all the way up to the massive institutional players.

Sure, Japan has a high level of external debt, but they stay on top of their payments quite consistently.

It’s easy to get spooked by those massive numbers, but generally speaking, a country's citizens' financial assets will outweigh its total external debt.

You could look at it like this: maybe 40% of people are savers, while the other 60% are either breaking even or living on credit. That 60%, plus the government, effectively owes money to the savers.

The only reason Japan can service its debt so smoothly is because interest rates are sitting at a mere 0.5-0.8%... if those rates jumped to 5%, they’d be bankrupt instantly—or rather, they’d have to hike sales tax from 5% to 30% just like we would😂... (since current interest costs already swallow nearly 50% of their budget due to those low rates)....

So, clearly, this 😍 debil isn't right when he claims interest rates on external debt don't matter... they matter immensely. They represent the thin line between servicing debt reliably and defaulting... and the difference between light taxation for the average working class (us taxpayers) and financial repression on an epic scale.

Absolutely. If we had a more organized country—lower taxes, better business conditions, you name it—we’d actually see those low interest rates on our national debt.

Let's be real here: would anyone on this forum actually lend their savings to the government for less than 5% a year? Personally, I know I wouldn't—not after watching how every single government has handled things over the last 15 years.

Harold Martin10 said:Absolutely. If we had a more organized country—lower taxes, better business conditions, you name it—we’d actually see those low interest rates on our national debt.

Let's be real here: would anyone on this forum actually lend their savings to the government for less than 5% a year? Personally, I know I wouldn't—not after watching how every single government has handled things over the last 15 years.

I completely agree... I wouldn't lend a dime to Linic even if he offered me 10%... I simply have zero faith in his (or our) ability to pay back borrowed funds. It's a mystery to me how foreign investors still bother lending to him (or to Dalicka and Suker before him) 😁

There is one thing I've been hearing for ten years now—the banking establishment (the bankers) claiming we aren't heavily indebted because we owe $100 billion but hold assets worth $700 billion... any sensible person sees through that logic immediately.
The legal framework to essentially legalize the looting of those $700 billion is being drafted right now; there won't be much pushback once they finally roll out the new property tax.🙂🙂

Hannah Alvarez2 said:Hey there,

This is my first time jumping into the econ threads, and honestly, I’ll be the first to admit—I don't know much about this stuff. It’s pretty much all Greek to me.
So, I was scrolling through some news on CNN (yeah, yeah, I know, it can be a total circus), and they were talking about how Japan’s national debt is sitting at 200% of their GDP. We just saw all that chaos unfold in the USA because of massive debt levels, and let's face it—half of Europe, including us, is basically living in a state of debt slavery right now.

My big question is: who actually owns all this debt? Which institutions are we beholden to? And who really holds the keys to the kingdom when it comes to ownership?

Actually, Japan's public debt is 214% of GDP, not just external debt.
Debt slavery is a mess cooked up by European politicians; the markets are just reacting to whatever moves those European institutions make.

http://epp.eurostat.ec.europa.eu/cac...2013-AP-EN.PDF

Back in 2009, the UK had a public debt-to-GDP ratio of 67%, Austria was at 70%, Germany at 75%, Belgium at 96%, France at 80%, and the Netherlands was at 60%.

Around that same time, the American government owed 36.6% of its GDP, Spain was at 54%, Canada was at 35%, the Baltic states were even lower, and various transitional European countries outside the EU were also all under 35%.
What happened was that creditors from those high-debt countries decided they needed to protect their capital from the credit expansion hitting the private sector in "new Europe" and places like Greece. Their solution? Liquidating Mediterranean countries.
And those stupid states just went along with it.

rustywalker82 said:Actually, Japan's public debt is 214% of GDP, not just external debt.
Debt slavery is a mess cooked up by European politicians; the markets are just reacting to whatever moves those European institutions make.

http://epp.eurostat.ec.europa.eu/cac...2013-AP-EN.PDF

Back in 2009, the UK had a public debt-to-GDP ratio of 67%, Austria was at 70%, Germany at 75%, Belgium at 96%, France at 80%, and the Netherlands was at 60%.

Around that same time, the American government owed 36.6% of its GDP, Spain was at 54%, Canada was at 35%, the Baltic states were even lower, and various transitional European countries outside the EU were also all under 35%.
What happened was that creditors from those high-debt countries decided they needed to protect their capital from the credit expansion hitting the private sector in "new Europe" and places like Greece. Their solution? Liquidating Mediterranean countries.
And those stupid states just went along with it.

Spot on.

The Mediterranean along with Ireland got totally wiped out because they owed money to the Germans, while the Germans didn't owe them a damn thing.
Everything else was just sixty-nine different Ponzi schemes.
🙂

The thing is, neither the citizens nor the politicians in those stupid states really made much of a fuss about it. I mean, looking at the short term—it was honestly a lot less painful for them than any other option they could have picked.

🙂
So yeah, I guess the folks in Iceland just have a permanent spot in my heart or whatever.
From the teenagers and college kids all the way up to the retirees.
🙂

Hannah Alvarez2 said:Hey there,

This is my first time jumping into the econ threads, and honestly, I’ll be the first to admit—I don't know much about this stuff. It’s pretty much all Greek to me.
So, I was scrolling through some news on CNN (yeah, yeah, I know, it can be a total circus), and they were talking about how Japan’s national debt is sitting at 200% of their GDP. We just saw all that chaos unfold in the USA because of massive debt levels, and let's face it—half of Europe, including us, is basically living in a state of debt slavery right now.

My big question is: who actually owns all this debt? Which institutions are we beholden to? And who really holds the keys to the kingdom when it comes to ownership?

1) Do not conflate your own identity with that of the state.
2) In the case of Japan, the debt is primarily owed to its own citizens—mostly retirees and those approaching retirement age. Any attempt to "write off" such debt would be nothing short of robbing those very people.

☕

Harold Martin10 said:The thing is, neither the citizens nor the politicians in those stupid states really made much of a fuss about it. I mean, looking at the short term—it was honestly a lot less painful for them than any other option they could have picked.

Yeah.
And then you've got the other countries—the ones that aren't acting like idiots. Once they went overboard with social transfers relative to their GDP, it actually became easier for them to set up the eurozone and just keep feeding budget bubbles by financing consumption through pure monetary illusion.

http://www.oecd.org/els/soc/socialex...tabasesocx.htm
Public social spending based on detailed data for 1960-2009; national aggregates for 2010-2012 and estimates for 2013, in percentage of GDP

By contrast, some European countries were much more affected by The crisis and growth in social spending and GDP were both below OECD average in Canada, Iceland, Italy, Portugal. Since 2009 The decline in public social spending was largest in Greece, falling from 24% of GDP to an estimated 22% in 2013.

Just so we’re clear, this joke of a currency ended up being overvalued by exactly double compared to Asian currencies in less than ten years. Meanwhile, those Asian nations were basically getting hit with trade deficits like a toddler gets hit with a tantrum.🤣

Debt isn't shrinking anywhere; if anything, it’s just ballooning globally.
I recall hearing somewhere that Turkey claimed to have paid off their entire debt a few months back, though I can't quite remember who said it... probably nobody at all.
But looking at the big picture, the debt keeps climbing and climbing... how much longer can this go on?
There is a simple answer to that.
One ought to study history, specifically the period leading up to World War I, and even more so before World War II.
It seems inevitable that a third conflict is coming, where everything will be wiped clean so we can start all over again from scratch.
And it is already becoming apparent where it might begin.
Somewhere high up in the mountains, tucked away in the clouds at the borders of China, India, and Pakistan...
Everyone possesses nuclear weapons, so let them clash... and if any assistance is required, the USA is right there, as it serves their interests most of all...

Hannah Alvarez2 said:Hey there,

This is my first time jumping into the econ threads, and honestly, I’ll be the first to admit—I don't know much about this stuff. It’s pretty much all Greek to me.
So, I was scrolling through some news on CNN (yeah, yeah, I know, it can be a total circus), and they were talking about how Japan’s national debt is sitting at 200% of their GDP. We just saw all that chaos unfold in the USA because of massive debt levels, and let's face it—half of Europe, including us, is basically living in a state of debt slavery right now.

My big question is: who actually owns all this debt? Which institutions are we beholden to? And who really holds the keys to the kingdom when it comes to ownership?

Essentially, we owe the West. 😁

All this endless back-and-forth regarding debt, creditors, and debtors would actually make sense—if we weren't dealing with nothing more than counterfeit money. The fact that our entire currency system is essentially fraudulent completely shifts how one must view this debt crisis—and more importantly, how it’s going to spiral and eventually collapse.

As for the question of who exactly we owe? I’d argue we don't owe anyone a dime. A debt that cannot be collected simply won't be collected. There are even legal frameworks, like Chapter 11 bankruptcy, specifically designed to handle that reality.