Seen a few memes recently about how to solve this economic/debt problem. They’re funny but unfortunately fantasy 🙁
Paying off debt is actually monetary deflation. All money is simultaneously a credit and a debt these days. The second you take out a loan, that bank literally creates that currency out of thin air and goes down as a credit note and a debit note on their systems. Governments don’t create money. So when someone pays off a debt, that entry is simply deleted and therefore the currency supply shrinks. Monetary deflation is the grim reaper economically speaking. Baaaaaad things happen.
Also when entering a sustained depression, people’s money habits change and they hoard. They don’t pay their debts or bills or luxuries and so it doesn’t matter how much stimulus a nation does, the kick start never occurs as the population doesn’t spend a dime and currency velocity goes to zero whilst the value of the currency is printed into oblivion. Middle class gets wiped out as they are now hoarding worthless paper.
Currently, 95+% of all global debt is owed to the World Bank and IMF. Literally the ONLY way to exit this impending depression without causing runaway inflation or deflation is for them to do a debt amnesty, wipe out all debt, all mortgages everything, replace all currencies with their own government-issued digi currency backed by the IMF’s Special Drawing Right, let every bank go bust and extinct and then do a like for like swap. You had £10k in your Barclays account? Cool, you now have £10k of digital Sterling issued by the government in your new ewallet.
This way, Governments can issue new money/currency WITHOUT creating debt at the same time. All these stim packages are literally debt! £xxxxxBilllion being used to bail out UK bizzes/furloughing etc etc etc…that’s debt. Debt the UK Gov are now taking out from Wonga which the public will end up paying back through rampant tax hikes in the near future.
Only drawback is that if this happened, cash would disappear and the Gov would have full optics on your finances and would probably instantly tax you at source. But no more tax returns to do, yay lol.
Ultimately, whether the world goes down this route is unknown. But what is inevitable is that physical cash will eventually be outlawed, Universal Basic Income will enter, all these stimulus packages won’t touch the sides and we’re in for a lovely black run ski slope down with many moguls.
So for us now, going to cash is good for the short term, but when they unleash ‘helicopter money’ from the skies and start to inflate our currency to death, then you need to exit cash and convert it to physical assets that can’t be inflated; Bullion, Bitcoin, land (maybe/iffy), cash-flowing businesses etc.
The next 3 years are going to be one super-duper clusterf**k but there is a silver lining to all of this.
I reckon that from 2025 onwards, it will be the biggest boom/period of prosperity humanity will ever see.
Put it this way, Gen X (a tiny demographic) entered peak earning/spending/consumption (age 35-45) just as 1 single exponential technology went vertical…the internet. Look what that did over the last 20 years.
But in a few years time, the biggest demographic in history, the Millennials will enter peak earning/spending just as 10/11 exponential technologies go vertical. It’s going to be an economic/humanity/prosperity orgasm like we’ve never seen….but slightly tinged as the George Orwellian big brother state will see/control everything.
Fun times ahead! :-SThis