What Everyone Gets Wrong About Global Debt | Economics Explained
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Is the global debt of over $300 trillion really a problem? And does debt for the global economy work in a different way from debt on an individual level? In this video we'll explain who holds all the debt that countries and businesses owe, and whether this will be a big problem in the near future.
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@Embassy_of_Jupiter 10 місяців тому
If banks aren't allowed to fail (in an artificially fixed interest rate scenario, like we had between 2009 and the pandemic), they are just incentivized to give out bigger and bigger loans to increase their profits, while driving up prices in credit-driven markets, such as real estate. Yeah that debt goes towards something productive, but you pay 2-3 times as much for it. At some point it's just indentured servitude with extra steps. Debt can only be good when you have functioning markets where governments don't guarantee bank profits.
@nicholasvaldez8322 10 місяців тому
The ultra low reserve requirements exasperate the issue as well. Massive loans out & little liquidity = huge issues when something goes wrong.
@catdogmousecheese 10 місяців тому
I know nobody likes it when the government bails out banks that lend out too much money, but I think it's important to remember that the purpose of bailouts are to prevent a worse case scenario which is a run on the bank. Furthermore, bank runs can often be extremely contagious causing a cascading effect of multiple banks failing which is another reason bailouts are necessary.
@nicholasvaldez8322 10 місяців тому
@@catdogmousecheese The issue is that it incentivizes certain behaviors and been normalized. They know that at the end of the day the fed will come in. The treasury promising to bail out the large back creates a capital flight from smaller regional banks to the large bank. The small banks force competition
@HH-le1vi 10 місяців тому
You also need to keep in mind that in low interest rate environments that more loans originated means that there's more risk and less reward because the interest isn't enough to repay the risk.
@nINJAP3RUNA 10 місяців тому
@@catdogmousecheese If the goverment stopped bailing out banks, the banks would have to start playing by the rules and bailing out wouldn't be necessary. Win-win.
@Mr-sweeny 4 місяці тому
The U.S. economy relies on ongoing credit and debt generation for sustenance. The Federal Reserve is expected to increase the money supply, leading to further debt accumulation for the average American. Meanwhile, foreign nations continue to desire the U.S. dollar, despite their own economies facing significant challenges, some even worse than that of the U.S. This situation raises concerns about who will ultimately bear the consequences of these economic dynamics.
@Dannyholt33 4 місяці тому
They do say gold will crash in a liquidity crunch However, many of those holding precious metals are preparing for such an event. So they are unlikely to be forced sellers. The paper market would tank and hopefully collapse.
@PatrickLloyd- 4 місяці тому
I wholeheartedly concur, which is why I appreciate giving an investment coach the power of decision-making. Given their specialized expertise and education, as well as the fact that each and every one of their skills is centered on harnessing risk for its asymmetrical potential and controlling it as a buffer against certain unfavorable developments, it is practically impossible for them to underperform. I have made over 1.5 million dollars working with an investment coach for more than two years.
@PhilipDunk 4 місяці тому
I find your situation fascinating. Would you be willing to suggest a trusted advisor you've worked with?
@PatrickLloyd- 4 місяці тому
Her name is “Vivian Carol Gioia” can't divulge much. Most likely, the internet should have her basic info, you can research if you like
@PhilipDunk 4 місяці тому
I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an email shortly.
@Dantee.15 10 місяців тому
Economics is the one college major that shows you how fake everything from actually being in college to the entire financial system. Being an economics major in post 2020 is mind blowing because you really are on the cusp of everyhting economists have been studying for decades
@DrHrishikeshApte 10 місяців тому
Ordinary people have so much inflated lifestyle they are spending more producing less(useless) While top 1% are producing more spending same And top 1% are bringing automation and AI which will replace ordinary(useless) people
@InnuendoXP 10 місяців тому
Economy is just one expression of just how immensely powerful systems of belief are. Things have utility and are necessary sure, but that often has little to do with the value abstractions we place on them. Though wars over water might show this up in the coming decades.
@JohnnyManu40 10 місяців тому
@@InnuendoXP Ultimately, economies will exist where there is need for things that cannot be easily obtained on ones own, and are especially needed for the continuation of life for the person at hand. So yeah, water will become an interesting one if not handled properly in the near future. But, that's only if entire nations ignore the potential of using things like desalination plants to both decrease the rise in sea levels, and supply fresh water to coastal farms, instead of having them drain the inland lakes and rivers, etc and so forth. There are plenty of options to fix many of the worlds problems. People just need to stop fighting and listen to those of us who are smarter than them.
@Mike-fx4nu 10 місяців тому
You're always on the cusp of everything people have been studying. THat's the point.
@InnuendoXP 10 місяців тому
@@JohnnyManu40 desalination plants to address rising sea levels?? I think you're underestimating the scale of the problem by many orders of magnitude there. The peril of economics is it has an implicit hubris in only counting or modelling what can be treated as an asset or resource insofar as it's directly valuable to us -- while not counting at all the immensely greater part of the picture that is the entire world of externalities that make sources of resources, assets, and labour, possible to exist in the first place.
@MikeyyyS 10 місяців тому
Inflation is producing a slew of problems throughout the world, including food shortages, diesel and heating fuel shortages, and housing prices and financial market crash. This global collapse might end up being a part of us for a very long time. With inflation currently at about 9%, my primary concern is how to maximize my savings/retirement fund of about $300k which has been sitting duck since forever with zero to no gains.
@noahway13 10 місяців тому
I have zero savings and I'm on disability. So... IDK>
@stephenpowstinger733 10 місяців тому
Inflation at about 9%?
@WaveRider1989 10 місяців тому
You don't open up CDs, bonds or nothing ?
@portrex56789 10 місяців тому
He's a bot, don't reply
@mmabagain 10 місяців тому
@@portrex56789 Exactly.
@tunnelvision3246 10 місяців тому
Every crash/collapse brings with it an equivalent market chance if you are early informed and equipped, I've seen folks amass up to $800K amid crisis, and even pull it off easily in an unfavourable economy. Unequivocally, the bubble/collapse is getting somebody somewhere rich.
@mcginnnavraj4201 10 місяців тому
I believe that there are techniques that may be implemented for significant gains regardless of the state of the economy or the market, but these executions are often made by investing professionals or advisors with expertise after the 2008 crash.
@hannahdonald9071 10 місяців тому
The problem is that the majority of individuals have the "I want to do it myself mentality" yet are underprepared for a crash, thus they end up getting burned. Financial consultants are typically the best candidates for investment positions, and in my personal experience, my portfolio has produced significantly in ROI since January 2020, during the Covid virus outbreak, totaling seven figures as of today.
@hannahdonald9071 10 місяців тому
@@finestbearhug2951 Salvatore Fortunato Sofia is the Consultant that oversees my portfolio. She's been able to gain some reputation and online recognition with over 3 decades in service, so it shouldn't be a hassle to find basic info.
@zoeytank2921 10 місяців тому
This recommendation came at the right time, very much appreciate it. Curiously inputted her full name on my browser and found her site top search, no bs.. 31 years of experience is certainly striking!
@VeryIntellijent 10 місяців тому
@@hannahdonald9071 bots - avoid
@Jackson-yh2nf 10 місяців тому
"US debt only accounts for a small portion of the total global debt" *proceeds to show that they make up a massive portion
@nikxneon6615 10 місяців тому
Not a massive portion, but definitely a strong plurality.
@jasonhaven7170 10 місяців тому
He often contradicts himself
@dinte215 10 місяців тому
@@nikxneon6615dude that's a comfortable 25% +
@SchmidtyProductions27 10 місяців тому
@@dinte215wouldn’t it be 10% since 30 trillion is 10% of 300 trillion?
@jaydonly2336 10 місяців тому
@@SchmidtyProductions27that 30 trillion is just federal government debt and it doesn’t account for all the other debt he mentioned
@RossSpeirs 10 місяців тому
It’s amazing we manage to do and build so many things despite everyone owing something else so much. It’s almost like money exists and doesn’t exist at the same time.
@jacobjones630 10 місяців тому
Money is the material relation between people and the social relation between things.
@impossiblejonathan9650 10 місяців тому
I personally would say that money itself is debt. The value money has is equal to a certain amount of goods and services. Let's say you own 10$. That basically you are owed goods and services worth 10$. You can then go to a shop and buy some bread, butter and apples and then the balance is equal once again. Just my personal view though.
@jonrolfson1686 10 місяців тому
All that is needed is faith and trust, and a little bit of pixie-dust.
@impossiblejonathan9650 10 місяців тому
@@jonrolfson1686 And between these three there is none that money could buy 🤬
@Mike-fx4nu 10 місяців тому
No, it's almost like we're robbing the future human beings in perpetuity. Oh wait, not almost. That's what's happening.
@the_phobia 10 місяців тому
Thanks for making this. Being in prime house buying and family starting age in Canada, I have lots of conversations with my peers about the long term implications of poor policy decisions our government makes, including artificially supporting our real estate bubble instead of funding investment in and business incentives, and other productive assets.
@Karlach_ 10 місяців тому
Imagine having a family in 2023. Nerd!
@NickSprecher 10 місяців тому
Great comment. I don’t think people in the US fully understand how Canadian policies have affected the Canadian housing market. The US housing issue seems to pail in comparison to the Canadian housing crisis.
@catdogmousecheese 10 місяців тому
I had an economics teacher in business school who really passionately believed buying a house and investing in real estate was a scam. He said he's always leased his home and will continue to lease till the day he dies.
@11brandonminer 10 місяців тому
As a fellow Canadian our financial policy choices are baffling. Getting a million+ dollar mortgage is easier than a million dollar business loan
@Tonyx.yt. 10 місяців тому
dont worry, liberals are read to increase the bar from 1 million on 2022 to 3 millions immigrant per year in 2030, then maybe with a 200 hours per month low income job peoples in canada would be able to afford a shared bedroom with 10 strangers inside a rat infested basement
@Jondiceful 10 місяців тому
One factor about the debt to GDP ratio not addressed in this episode is that GDP is generally an annual value, while most debts are not meant to be paid in a single year or even a single decade. People don't normally take out a mortgage equal to their yearly salary, and virtually nobody pays their entire mortgage in a year. It might be more informative if we had a way to measure a yearly debt repayments to GDP ratio. Oh and one other thing. Any discussion of debt in the USA is not complete without taking into account Student Loan debt and medical debt.
@trevinbeattie4888 10 місяців тому
He did partially address this by comparing global debt to global net worth, which is its more direct counterpart. I think it might have been helpful to also compare annual _borrowing_ (or for governments, deficit spending which amounts to the same thing) against GDP.
@abhitiwari5346 9 місяців тому
@@mikecollon100 This isn't coming from this video bro. You initiated good but then you went out of orbit.
@adamjohnson6016 9 місяців тому
@@mikecollon100 This sounds like someone living in a bubble of economic understanding, not an unbias understanding.
@awesomestuff2496 9 місяців тому
@@adamjohnson6016Do you have any valid counter argument against his views?
@katiecannon8186 5 місяців тому
Our government owns the 💵 printing machine. Conflating the way federal finance works with how household finance works is just sillyness Households don’t own the 💵 printing machine Our government can never run out of the ability to print 💵 You gotta work to try to earn 💵 When you take out a bank loan, you’re essentially promising to pay your bank back in government issued 💵 We use government issued 💵 to shop, pay our banks back, pay tax & net save. If we have enough 💵 savings, we can buy a treasury bond and earn interest on our government issued 💵 Government spending funds private sector net savings
@mcox565 10 місяців тому
Excellent video! I have little training in economics. The video did a great job explaining debt.
@stephoh8613 10 місяців тому
I don't know if this may be the plan for the next video, but it would be great to discuss what happens when debt is not payed back - forgiven or defaulted on. I think the part on who owns the debt at the end is possibly a little short to point the whole picture of the consequences of debt and positive vs negative aspects. There is a growing trend in political debates about loan forgiveness (from the US college debt to government debts) and that changes a lot about the risk/value calculation of debt and the potential impacts of debt on the future. Getting away from economics here, but it would also be an interesting topic to discuss asset value and investment if a time of demographic shifts - so far the world has only known demographic growth; what happens when the world population stagnates or diminishes? Can't turn to immigration on that scale...
@itcamefromthedeep 10 місяців тому
Simone and Malcolm Collins may be the authors you're looking for regarding demographics and finance.
@stephenpowstinger733 10 місяців тому
“…not payed back…” PAID.
@mohdghani7171 8 місяців тому
@@stephenpowstinger733 you got the point,no?
@stephenpowstinger733 8 місяців тому
Yes
@katiecannon8186 5 місяців тому
Conflating government bonds (so called government bonds”debt”) with private debt is just wrong. Our government issues the 💵 we use to buy treasury bonds. Bonds are literally just an interest bearing savings account. Our government pays that interest by printing up some 💵 Our government owns the 💵 printing machine and can never go broke You don’t own the 💵 printing machine so can go broke.
@bahmanrouhani9390 10 місяців тому
I'm a huge huge fan of the content you make but I kind of wish this channels videos was a bit more subject oriented rather than having case studies or news/event based videos like they are now. I love this channel and have been a long time subscriber, but since almost all videos are made so that everyone can learn from them, frequent watchers end up going through same concepts with each new video without learning much. As I said, I absolutely love this channel and am a HUGE fan, but it would be nice if you also had a set of videos where you'd go through economic subjects and concepts in depth and detail. Thanks for the awesome videos.
@AlanTheBeast100 10 місяців тому
" ... as long as a few things don't wrong." Statistically a few things will go wrong at the same time at some time ... And a thing that goes wrong might not be the expected thing, but some thing that nobody ever expected...
@TomTomicMic 2 місяці тому
We went through two world wars directly in Europe, after the second war Boomers started the best period of development and prosperity, however the current leaders are implementing ideology rather than practicality, so things are going pear shaped, they will be in parts unsustainable, you can't have things that cost more than you can afford!?!
@AlanTheBeast100 2 місяці тому
@@TomTomicMic Unconstrained development demands unlimited resources. That is the fundamental failure: a belief that there are limitless resources while the world population is growing.
@kijake1 10 місяців тому
Lately, I've been watching your videos and I've been wondering if you've read Doughnut Economy: Seven Ways to Think Like a 21st-Century Economist? This view of economics actually fits what I think economics should be.
@veganchaatparty 10 місяців тому
this was a super super superb video....such complex topics simplified and explained so beautifully.....thanks so much for sharing....
@supercommie 10 місяців тому
I'm learning a lot from this channel. Thanks for posting.
@mvhuber 10 місяців тому
Great video, but what I think you missed was QE (Quantitative Easing), or the printing of money. When you accumulate debt, and then never really tighten up, and simply print debt over and over again due to political pressures, what then happens. Obviously you see inflationary pressures that are not the result of productivity, but the result of simply monetary policy.
@therealcool1144 10 місяців тому
or maybe this inflation is the result of a supply shock and the shut down of borders inducing a shock in supply and a bottleneck of demand
@TFN_Coaxa 9 місяців тому
One big problem here is, that we compare the debt to our assets, but these assets themselves are also linked to the debt. That means, that as showed in the video 68% of our assets value are real estates, but the reason why they can make such a massive part of the asset value is, because those prices are already pushed to the upside for decades by increasing debts. Especially the real estate area profits from our debt fueled system, because the interest on those loans are very low. As long as this system works its fine, but once it breaks the value of real estate will fall dramatically and with that decreasing the net value of our assets to a point where big debt IS a big problem. 2008 was a first sign for that. After that the 0% Interests were set up to keep real estate prices up. In my opinion something that cant work for that long, because at some point a new generation isnt able to afford any real estate on their own (or they have to take even bigger debt). This gets rather worse than better.
@aroto 10 місяців тому
This was actually a very helpful video and put things in prospective
@setop123 10 місяців тому
Brilliant and very pleasant to watch, thank you for theses 😄
@NickSprecher 10 місяців тому
Your channel is a masterclass. Handing out Econ degrees. Well done.
@argongamer8986 10 місяців тому
Definately
@obviouslymatt6452 10 місяців тому
eh i dunno. these guys get a fair bit wrong, i would be cautious of overestimating your knowledge based on these videos
@Unknown-jt1jo 10 місяців тому
@@obviouslymatt6452 Yeah, you can't compare watching UKposts videos to doing real economics. This channel is edutainment.
@dead-claudia 10 місяців тому
@@obviouslymatt6452obviously they aren't perfect, and they admit that in literally every main channel video. also nick to his credit is merely exaggerating to make a point.
@Unknown-jt1jo 10 місяців тому
@@dead-claudia It's not a question of "perfect" or not. Real economics is studied rigorously and mathematically. This channel is fun, but it conveys only basic concepts in highly simplified ways. Which is absolutely fine, as long as you know what you're getting.
@rising_crust 10 місяців тому
At 11:41 you said $300 billion instead of $300 trillion and then $700 billion instead of $700 trillion. Love the channel!
@geoms6263 10 місяців тому
billion trillion it's too big a number for the brain to understand anyway.
@fbsfgr 2 місяці тому
Please never try to be an economist@@geoms6263
@YoungMule 10 місяців тому
The debt issue has always confused me and I didn’t know enough about economics to articulate the question properly to find an answer. I didn’t get who we owed money to and why so many were nonchalant about such a staggering amount. This video has cleared up a lot of that thanks 🙏
@robertagren9360 10 місяців тому
They owe the people money but giving money for free is illegal without a complicated game.
@pan2aja 10 місяців тому
The Boomer created debt for the younger and younger generation to pay. Basically our children who have to pay their grandparents debt
@fbsfgr 2 місяці тому
Boomers made it meaningless when they left the gold standard anyway
@matter7864 10 місяців тому
Love the direction of the channel! Thank you!
@papaplatte3909 10 місяців тому
So happy you are going to talk about debt distribution next week. I was the whole time like yes I understand how debt means more available money because global networth + debts(assets). But I also was the whole time like , okay but somehow it seems that not everybody is benefiting from this more available money. Looking forward to hear your take on this :)
@ribertfranhanreagen9821 9 місяців тому
The most irony of current system is the one that provide real value is the one that benefit less, compared to those that understand the system and play it. Just see who is richer a farmer that contribute to your continuity of living by providing resource for people to eat. Vs a banker that basicly play the economy system
@Mohammadalhajj55555 10 місяців тому
I am honestly interested in this particular topic, and I am more interested in the 'interest' on the debt and how that affects the value of currency. It feels like there should be a more robust way of linking debt to the value of assets. Some organizations, like banks too big to fail, and governments too useful (politically) to let die, are insensitive to the laws of supply and demand.
@itcamefromthedeep 10 місяців тому
Interest rates are sometimes referred to as the price of money. The lender is exchanging current-money for an amount future-money, indexed by the perceived risk that they won't get it all back.
@Mohammadalhajj55555 10 місяців тому
@@itcamefromthedeep but doesn't that just mean that the expected future interest is money being created from thin air? I know this has been asked a lot, but i still don't get how this is sustainable with lenders expecting more money from the market than currently exists
@tellmemoreplease9231 10 місяців тому
@@Mohammadalhajj55555 Good one. Of course they "have" to create (borrow into existence) more money to pay back interest to the banks. Inflation is baked into the cake..... Now we are in a debt trap. They have to borrow even greater amounts to prevent the collapse.... Thank heaven we had the never ending wars, the great financial collapse and Covid crisis. What's the next excuse to borrow more money?
@Lioin 10 місяців тому
@@Mohammadalhajj55555 The expectation is that the production of value will grow as well
@blackcountrysmoggie 10 місяців тому
That was a good one. Genuinely interesting. Thanks
@ShamileII 3 місяці тому
Documentary level quality video! Keep up the great work!
@jonathanabgrall6075 10 місяців тому
"Governments hire economists to make sure their projects are financially viable", as a Canadian i genuinely laughed out loud.
@zyler9462 10 місяців тому
EE said they hire economists but not that they necessarily listen to them.
@KRGruner 9 місяців тому
@@zyler9462 It's better NOT to listen to them. Just sayin'...
@SexCrispy1 10 місяців тому
If debt works according to the supply/demand system, how is it with insurance, pension funds or banks and their regulatory obligation to hold high-quality government bonds? Here, countries/states have created customers for their debt who are forced to buy/hold in a certain sense. This was particularly noticeable when government bonds were negative. Insurance companies, pension funds or banks are obliged to provide collateral in order to carry out their business.
@katiecannon8186 5 місяців тому
Our government just prints 💵 It’s a policy choice to issue treasury bonds, ie, safe interest bearing savings accounts.
@raybarry4307 10 місяців тому
This was a very ideal version of how the global economy Should (I stress Should) work in an ideal world. It doesn't even slightly take into account political realities.
@Articulate99 10 місяців тому
Always interesting, thank you.
@kimyeonahchannel 10 місяців тому
So if i'm getting this correctly, the global economy borrowing from the global economy future self is like someone borrowing a "good time" from their future self by going to a bar and getting wasted, but their future self have to repay that good time by dealing with the terrible hangover tomorrow morning, as opposed to just having a boring friday night and a normal tomorrow morning
@jacobjones630 10 місяців тому
All debt is essentially a gamble on the future.
@nINJAP3RUNA 10 місяців тому
I guess in this analogy you are borrowing from your future self every time you spend time on anything. Spending time working or exercising could be seen as spending the borrowed time in a productice manner, and spending the time watching TV or drinking could be seen as spending it unproductively. In the end you have to deal with the consequences of what you have spend this borrowed time on.
@vivienneduong6541 10 місяців тому
More like not using protection and ends up paying child support.
@dawidwtorek 10 місяців тому
Better analogy would that of staying late. You could stay late by going to a bar, getting wasted or you could stay late learning yourself a new skill. In both examples you borrowed energy from the following day but in the second example you invested that energy to become more productive.
@Unknown-jt1jo 10 місяців тому
Nope. A lot of the borrowing is for the sake of economic development, which benefits future generations.
@liversuccess1420 10 місяців тому
Great video. During the debt ceiling issue, it was very clear that many Americans do not understand that gov't/national debt does not work the same as individual debt. We may be foundational to the global economy, but we do have quite a bit of financial illiteracy in this country. This video is helpful.
@weird-guy 10 місяців тому
Anyone that really taught they wouldn’t raise it are dumb imo and I’m not even from the USA
@Unknown-jt1jo 10 місяців тому
As a foreigner who moved to the US 20 years ago, I was actually impressed with how financially savvy the average American is. E.g., in many other developed countries, people don't buy or sell real estate all that often--maybe once or twice in their lifetime (at most). By contrast, the average American sells their home every 6-9 years. Thus, there's a whole widespread vocabulary associated with buying and selling homes (e.g., the concept of a "starter home"). There are also lots of realtors and other professionals who buy and sell real estate. It's similar with finance. Poorer Americans may be less financially literate, but middle-class Americans strike me as very financially savvy compared to other nations. But, back to your point, global economics is extremely complicated. Very few people really understand it.
@childofaether8733 10 місяців тому
@@Unknown-jt1joI completely agree. In France the financial literacy is horrendous. Nobody knows anything, and even something like the concept of inflation goes completely above the head of the average citizen when brought up on the news during bad times. Investing is almost a taboo, it's seen as bad by the lower class, and even most middle class hardly understands the importance of investing and keeps their money all on a shitty savings account or even checking account. Then again, we do have a much poorer middle class and buying a home as a couple of two middle class individuals (now more like upper-middle) is realistically the most that can really be achieved. Its probably due to European retirement programs being more government controlled and with less individual responsibility (at the cost of being dependent) for building up their retirement, healthcare...etc... Technically it's a good thing to have those social benefits, but it does create a lack of necessity for financial literacy, which (in France at least) is also never ever mentioned in middle/highschool for the vast majority of curriculums.
@liversuccess1420 10 місяців тому
@@Unknown-jt1jo That's a fair point. And I suspect a lot of people in other countries also don't know much about the differences between national and individual debt. I guess the debt ceiling debate irked me just because the stakes for the global economy were so high and it was very politicized.
@eclipsenow5431 Місяць тому
Awesome! Love your work
@matthewdunstone4431 10 місяців тому
Thank you! This was excellent.
@Friedrich713 10 місяців тому
"When the global economy borrows money, it's not so much borrowing from some other entity as much as it's borrowing money from its future self" feels like an unnecessary complicated way to say, that a national or commercial bank is creating money & debt by extending their excel spreadsheet :D The way our monetary system works, at least the base functionality without its complex implications, is rather simple.
@therealcool1144 10 місяців тому
I went to an economic convention like 15 years ago, the people called MMT said this, nobody believed them but I knew they were correct as I worked in a bank.
@hauke2996 9 місяців тому
I think its not it is just higher the amount of globally available money
@nicholasdean3467 10 місяців тому
I thought I read somewhere that it is impossible to calculate how much debt there is globally since anything you do is on credit multiple times over.
@OlavAMaren 10 місяців тому
I love the timeline at 8:50 in the video. Especially where 1990 steps in and hides the 2007/8 financial crisis. :)
@AnonNobody 10 місяців тому
I think the lines are accurate to 2008. As 2010 will still show what was on the other side.
@adsharma916 10 місяців тому
Nice work!
@roberthuntley1090 10 місяців тому
I think that this understates the problem. The UK government 'owes' me a pension from the age 66 until I stop breathing, and similarly for the public sector pension I'm currently receiving. The same applies to NHS medical care, means tested social security and so on. I don't believe that these sorts of debt are recorded anywhere.
@donkeyDangerMouse 7 місяців тому
What you are talking about is a specific social case of the UK, where this video is a global perspective. However, social systems are covered under government spending. Most of the world doesn't have social structures like the UK and to produce a video that details the specifics of each country on earth would probably be redundant before it was finished.
@madelineariah 10 місяців тому
This is honestly the best and most concise explanation of how debt works and I hope more people get to see this video. One of the big things that stuck with me during the pandemic is that for a while, the US Treasury was floating the idea of minting a $2 Trillion coin, and everyone was losing their minds over it. But given that the US can and does borrow against assets, and it has a truly limitless supply in the form of both tangible resource allocation AND potential resource creation, it never should have been a point of discussion to begin with. According to USDebtClock, our total US assets is approaching $200 Trillion. Expect that number to skyrocket when AI goes mainstream, when energy storage becomes optimized for renewables, and if water scarcity ever stops being an issue since the outputs those things will provide to other industries is unquantifiable.
@AwesomeHairo 10 місяців тому
Government restrictions*, not pandemic
@tellmemoreplease9231 10 місяців тому
"our total US assets is approaching $200 Trillion." The value of those assets could change tomorrow. The stock market massive bubble could collapse to near zero (theatrically), the real estate market could collapse 40-60 % or more. But the national debt WOULD REMAIN $32 Trillion, that has to be serviced.
@theconqueringram5295 10 місяців тому
This is interesting and I look forward to part two.
@ailove313 10 місяців тому
🥇 thanks for sharing
@insanittiez4860 10 місяців тому
If everyone is owing, who is actually making the money. I feel like at some point, this is going to be a serious problem
@NLuck-eh5cd 10 місяців тому
Debt is a good idea, to an extent. Debt is basically non-productive capital being converted to productive capital - the factory owner produces X goods for Y return, but only spends half of Y. The other half can either sit in a vault as non-productive cash, or be issued as debt and make a percentage return each year - so generally issuing it as debt is better. Meanwhile, another factory scaling up can access this excess capital to scale up their own business, meaning both halves of Y are generating economic output, while before only one half of Y would, while the other half sits in a bank vault doing nothing. This is the capitalist approach, the other way to ensure both halves of Y are being used productively is a soviet-style centralized command economy, which has had a pretty bad track record since markets are generally far too complex to plan centrally and still match the output of a more free market. So debt only becomes a problem when the invested half of Y isn't invested into productive assets - this is EE's point about real estate. Treating non-productive but necessary assets like real estate and food as investment assets is terrible for the global economy because it grows the expected repayment rate in the economy (as a percentage of the loan), which drags other consumption down, without actually adding any production into the economy.
@antonyjh1234 10 місяців тому
Debt is a great idea for those that create it because it costs them so little, the debt you are talking about is basically other people's debt that a commercial bank lends out, so it's always being productive for them, multiple times. Debt as you say is a good idea when a factory owner can produce something people are prepared to pay for, the issue is a declining population in the modern world. The doubling of the worlds population was great for debt, the next 30 years and we'll see 50% of that and if you are in a monetary system where there are going to be 50% less customers then debt get's more difficult to pay back, now imagine a country like Japan, that is supposed to lose 50 million people, or any of the 23 countries that are going to lose 50% of their population by 2100, debt becomes riskier and riskier the more time goes on.
@DaveSmith-cp5kj 9 місяців тому
Debt is never a good idea. It is a gamble but no one wants to call it out as such, because then we would also have to recognize the fact that our fiat is fake money designed to hide the debt.
@jaylewis9876 8 місяців тому
This is the best channel on economics!
@zhang73 4 місяці тому
This is a great video. There is so much misconception about debt out there. The simple concept that modern monetary of debt based is something that a lot people don’t comprehend and refuse to do so. Without debt we don’t have any liquidity.
@fbsfgr 2 місяці тому
Gfy leech!
@Urbanfour 10 місяців тому
Could you do a video on Real Estate and why it's often immune from the Supply and Demand law? Like how Landlords can sit on empty homes without dropping their prices despite their being more empty homes then there are people who can afford them (both in rent and in buying).
@M3ganwillslay 9 місяців тому
landlords need to pay taxes whether or not their assets are occupied . rents cannot be reduced just becoz bums cant afford it .
@Urbanfour 9 місяців тому
@@M3ganwillslay False. One of the reasons they will often sit on empty apartments or homes is because they can use the "lost revenue" as a tax write off. So they have little incentive to lower the price and get someone in there.
@jeffmorgan4972 3 місяці тому
You might be surprised how few housing units are sitting empty. Rents and selling prices do in fact fall because of owners avoiding units sitting empty. Happening in many cities right now as new supply (empty units) are entering the market.
@omargoodman2999 2 місяці тому
The simple answer is "Inelastic Demand". "Supply and Demand" isn't a be-all, end-all principle that functions the same in any given situation. There's _nuance_ to it and one of the influencing factors is "Inelastic Demand". For example, in a more _Classic_ setup, say Oranges, there's a certain Supply of Oranges and a certain Demand for Oranges. If you undercharge for Oranges, someone will come along, buy your underpriced Oranges, and flip them back onto the market for a profit. If you overcharge, no one will buy from you and your Oranges will spoil before you sell them. Now let's say something happens to the Supply; a bad harvest sharply reduces the available Oranges. Now, if you charge too little, you'll run out of supply too fast and miss out on potential profit you _could_ have made. By contrast, by raising prices, fewer people can afford the Oranges, but there are fewer to go around _anyway_ so that's fine. Those who *can* afford it and are willing to pay a premium for what is now a rare commodity will do so. Those who can't or won't will scale back and buy less. Thus, eventually the Supply is able to "bounce" back; it's _Elastic._ Same if there's a sudden _increase;_ people will buy more surplus at cheaper prices until the supply drops back down. And, on the flipside, if Demand shoots up with fixed supply, the price adjusts to either make the Supply last longer in the face of greater Demand, or get rid of surplus before it goes bad if Demand drops off. But let's look at something else. Not Oranges, but _Fire._ Your house is on Fire and you need it extinguished. Not only do _you_ need it extinguished, the whole *community* needs the Fire put out before it spreads and burns down _more_ homes. A Firetruck shows up at your home, and before they start hooking up their gear, they start pitching you a package for what level of "Combustion Deterrence and Removal" you'd be interested in, and the services available with each package... while your house is burning down. They *do* have some great deals, like a "Fire Sale" on _The Chemical + Hydro-Spray w/ Family Evacuation included,_ but they've kinda got you between a rock and a hot place. Not like you exactly have time and leeway to "shop around" for the best price here. This is an example of "Inelastic Demand", when people have limited reasonable capacity to adjust their demand in response to availability or price of goods/services. No matter how expensive it is, if the alternative is *dying* or *your home and all possessions burning down,* most people will pay whatever price is quoted. So things related to staying alive (ah, ah, ah, ah), health, safety, etc. are relatively Demand-Inelastic. And Housing is like that, at least to a certain extent. Couple that with a Landlord's ability to get a tax writeoff for lost revenue from unoccupied property to offset tax burden, and the fact that they base Rent prices, typically, to account for certain intervals of vacancies (your Rent pays for the tax for a few months _after_ you leave), and competent Landlords can sit on properties for quite a while to make sure they get a "good price".
@djayjp 10 місяців тому
EE, could you do a video series on Environmental Economics? The value of natural assets in dollars. How this compares to earnings generated vs exploiting those resources and their lost value. The subsidies to fossil fuels vs the money spent to reduce carbon emissions. I'm interested in exploring the perverse tendency of humanity to be self-destructive in totally irrational ways.
@brexistentialism7628 10 місяців тому
Greatly explained even though it's very general and top-level.
@childofaether8733 10 місяців тому
The issue of real estate appreciation is that on a global level it creates no material value like said in this video, but on other scales (be it a person, a family or a company) it has infinite value because of the infinite rent income. There's even the feedback loop that real estate investment is even more valuable because that makes the asset itself always increase in value over time (despite short term crashes). This is largely why the first home purchase for primary residence is the number one priority investment, and it's also why mega corporations like Blackrock are buying more and more family homes for the infinite value they will provide (along with control of money supply going into their hands, since renters become dependent).
@fbsfgr 2 місяці тому
Boomers are determined to make sure this ends in blood
@TerryVogelaar 10 місяців тому
To me, there is an apparent blind spot in this narrative, being that debt creates a power imbalance. Those who have can lend to those who don't. In other words: when debt increases, the power of the rich increases while the poor become less powerful. Growing debt means growing inequality. Hopefully, this will be addressed in the next video.
@Obsidian-Nebula 9 місяців тому
Inequality is natural. Everyone will not have the same amount of money
@TerryVogelaar 9 місяців тому
@@Obsidian-Nebula True, I don't propose everyone should have the same income. However, the differences have already become too big, and we should work towards decreasing the difference. We should live in a meritocracy, meaning whoever contributes the most earns the most. But we don't. Instead, those who already have a lot of money are likely to get even more, while the poor, who actually add value instead of just money, do that for the lowest salary. Yes, inequality is natural, but that doesn't mean we should increase it.
@sirtic6880 10 місяців тому
another good measure of an economy is PPP or Purchasing Power Parity which isn't converted into dollars like GDP and basically looks at what a person pays for a basket of good in any given country which I think it a more practical measurement for the average person.
@Foxtrotopia 10 місяців тому
PPP has a lot of drawbacks and can really only be used to compare two economies against each other, and it falls apart in a lot of situations. For example if cola costs me $1 and you $2, then I would have a higher PPP because I could buy 50 colas and you could only buy 25 if we both had $50. However, if you make 3x more than I do, then in reality you could buy more cola than me. Or if we make the same amount of money and pay the same amount for Cola, then we would have the same PPP. But what if you also pay 50% in taxes and have high rent prices. Then we have the same PPP, but I can buy way more cola
@jimmcneal5292 10 місяців тому
@@Foxtrotopia ppp is inaccurate not because of that
@user-od4mg4ps4x 10 місяців тому
This is straight to the point
@DonaldCicc 10 місяців тому
Excellent video as usual. A few things to add. There are debts that are not included in this video. Responsibilities such as pensions, social security, medicare and other obligations. According to one economist who calculated the total US debt taking these into consideration the US debt alone is $220 trillion. However some of these obligations are fully funded, as do some states have their pension plans, others like California have a shortfall of $1.4 trillion, and social security is going to run out of those treasury bills in the next few years and only be able to make 79 percent of their obligations once that happens. I would love to see Economics Explained delve into this issue and how demographics might impact this debt load Thank you!
@dead-claudia 10 місяців тому
strictly speaking, those aren't debts, but promises. - social security functions more like insurance, in that everyone pays in, and the gov has the final say on who is and isn't allowed to receive payouts. debt can in theory be taken out against this, but it's rare and both economically and politically risky. - medicare is literally just insurance. only difference from public insurance is it's tax-funded. likewise, the gov can (and commonly does) deny payouts almost arbitrarily. - pensions come in two flavors: glorified long-term savings accounts and social security-like payout systems. the first is obviously not debt (the only guarantee is the account balance), and for the second, see the first point.
@DonaldCicc 10 місяців тому
I agree these are not debts but responsibilities or as you said promises. But they are expected to be honored. And as I said they range from fully funded, to partially funded, to no funding. "pensions come in two flavors: glorified long-term savings accounts and social security-like payout systems. the first is obviously not debt (the only guarantee is the account balance), and for the second, see the first point." If the savings accounts are underfunded and cannot meet their obligations that is certainly debt. Social Security has already been increasing the actual debt. As the T Bills the SS Department has been cashing in to pay recipients the Fed has had to pay those, by borrowing. Once they run out of those in three to five years the system will only take in enough tax revenue to pay 79 percent. Medicare is health insurance, also funded by taxes, and will start running a deficit soon, which is projected to continue growing. And pensions, such as the California one, well states can declare bankruptcy and then pension holders might only receive pennies on the dollar (see the city of Stockton going down this path). That is going to have large effects in the California economy.
@mirzaahmed6589 10 місяців тому
A lot of "good debt" is anything but. Most people with student loans are working jobs they could have done with just a GED, or even a middle school education.
@TheNaturalLawInstitute 10 місяців тому
Congrats. This was one of the most normie-friendly bits of necessary education Thanks for all you do at EE.
@Conformitus 10 місяців тому
🎉 thanks for another video
@alpha7158 10 місяців тому
This is one of your best videos imo
@steadyrow 10 місяців тому
the only way you escape national debt is by printing money, printing money devalues the currency completely screwing over currency holders.
@CaillouThePimp 10 місяців тому
Not true. The government can also just spend less, although that would also have wide ranging negative consequences.
@jacobjones630 10 місяців тому
You can also just make more nice stuff for the currency to represent. Mass mobilization of the work force to make useful things instead of investing in a tunnel under las vegas that fits one car at a time
@enderreaper1482 10 місяців тому
That's what post WW1 Germany did, thus hyperinflation.
@juanmartin1729 10 місяців тому
The only reason why the usa manages to avoid a debt crisis is due to their possession of American military bases across the world and control over the Swift system. Without these elements, they would likely suffer from high inflation, currency devaluation, and economic turmoil, similar to what countries like Turkey, Pakistan, and Egypt have experienced.
@royce9018 10 місяців тому
lol
@tellmemoreplease9231 10 місяців тому
Also, The Petrol dollar..... That is why we must control the worlds oil. Oil producing nations must sell their oil for dollars. Artificial demand for the dollar keeps the value up. Big one.
@SryYouFail 2 місяці тому
The clips of people in science coats pointing at random graphs really helped me understand. Thanks
@madhijz6846 10 місяців тому
I remember somewhere pre-pandemic that the average person would have $40.000 but that probably relates more to how the M1 money supply was measured
@blinking_dodo 10 місяців тому
Question: what would be the positive sides of a nation without debt? And would such a situation be possible or favorable in the real world? (Including what the effects of deflation would be on such a nation?)
@N.i.c.k.H 10 місяців тому
A nation, voluntarily without debt, is a nation that can't think of any productive way to spend any borrowed money and, if it is a democracy, its citizens are not demanding that it spend any more on anything. In the real world citizens always demand that their governments spend more so a debt free nation would probably have to be a dictatorship (for brief periods of time it can be just about possible for small, resource rich countries such as Norway but it cannot be sustained when the resources run out and the change of circumstances might well be more painful than just having debt as humans are very ubforgiving when things get worse)
@weird-guy 10 місяців тому
They will be poor imo, how can anyone start a business if they don’t got any money to begin, how they got customers if customers have no money in their wallet. Imo debt is necessary but at least in the personal debt a lot of people shot themselves on the foot , but that money still end in the corporation pockets and after in their employees pockets. Is to complex for my dumb brain, although imo debt is necessary it still creates a lot of inefficiencies like corruption, bad used funds ect
@BilalAhmad-ff3xq 10 місяців тому
Just ask the soviets.
@Kriss_L 10 місяців тому
A lack of, or minimal, national debt would be very good. Very limited government spending would allow for very limited taxes, so that people could keep the money they earn and be able to participate in the economy. And it would also be a great incentive for businesses to be able to operate without having to pass on the additional cost of taxes for its goods or services.
@blinking_dodo 10 місяців тому
@@weird-guy "They will be poor"... If you have enough money to pay off your debts, you certainly are not poor. But i wonder about the economical implications. Especially since having money instead of debt would make deflation beneficiary to you.
@MatsueMusic 10 місяців тому
It’s strange that the system is designed in such a way that once money flows to the common person that interest rates go up and markets crash. Not advocating for handing out high risk loans without due diligence but the fact that the same few people have the opportunity to capitalize before the market crashes, is suspicious.
@anonymousanonymous6424 10 місяців тому
Great observation.
@montecorbit8280 10 місяців тому
At 4:11 World assets.... I believe you were mistaken when you say the world assets is equal to 1 quadrillion US dollars. There was a TV episode in the US, something to the effect of "Selling America". The host at the episode totaled up yes that's the United States, and came up with a value considerably larger than that.... The Host, if my memory serves, with a guy by the name of Donald Trump....so it should be easy to go look up what the television episode was on IMDb or something. Still enjoy your videos, especially with the ones with the economic leader board....
@tejbirsingh5661 10 місяців тому
Great video. Thank for explaining this concept. Please, do a follow up video on debt in the future adn elaborate more on national and personal debt.
@user-ny5xe2hx7t 8 місяців тому
It is good we acquire as much wealth as we can, most people fail to understand what it takes to become wealthy, they want to become wealthy overnight by thinking their savings will help them attain that, they fail to understand that investment is what truly builds wealth. I advise you all key into investing and earn side money than depending on your savings if you truly want to be wealthy
@KadreYilmaz 8 місяців тому
The thought of retirement has given me the opportunity to sort out another source of earning
@KadreYilmaz 8 місяців тому
I started paying more attention to stock and learning more about online trades
@JewellOguin 8 місяців тому
Meeting with someone genuinely good at the financial market was a break through for me
@AlanMitchellAustralia 10 місяців тому
The whole concept of summing debt without deducting assets is pretty useless. I could take out a $1bn loan, place the funds in an offset account, and pay no interest indefinitely. I've added $1bn to world debt, but my net assets remain unchanged. Debt, as a single metric ignoring assets, is simply a measure of financial transaction volume. The more 'debt' in an economy, the more movement of funds taking place. It says absolutely nothing about net wealth and financial stability.
@stephenhowes6509 10 місяців тому
I think why everyone is hyper focused on Debt to GDP (income) is because it's easier to measure. Measuring total assets of a country is next to impossible.
@thatguychris5654 10 місяців тому
Just like beauty....value is in the eye of the beholder.
@oblivianji 10 місяців тому
these bizarre intonations at the end of many sentences are too good
@tryep5567 10 місяців тому
So, what I've learned from EE is that national debt doesn't matter and we can basically go infinitely into debt as long as asset prices artificially inflate too. But maybe I'm wrong
@liversuccess1420 10 місяців тому
Why would it only be if asset prices are "artificially" inflating? If asset values are determined by the market, i.e. supply/demand, that's not artificial. Isn't that what we want to continue happening? If no one is making, spending, loaning, or borrowing any money, it would mean the global economy has completely collapsed...not sure about anyone else, but I would rather it didn't.
@TheChrisaige 10 місяців тому
Thats the conclusion you reach when you read into MMT aswell. National debt can be a problem, but not like most people think, its only when said debt does not output new wealth, that debt becomes problematic. Thats why my small nation (Austria) has spend close to 5 billion euro for a new traintunnel that goes from carinthia to styria, but this debt actually never has tobe repaid, because its actually backed by a asset that will provide enormous value for the country for atleast 60-80 years to come This is what people have to realise about money/debt. The issue of national debt is not the debt itself, but the wealth created by it. If you live in the US and see most national debt just being sifoned into car infrastructure and single family housing, then I understand why you are concerned, because these things are inherently shortterm economicly decitions made on a national scale. Suburbs and car infrastructre are financially unsustainable and only create wealth for a small portion of the population, not to mention the externalities like land and resource use that also hurt the economy at large
@Gustav_der_III 10 місяців тому
What really limits our economy are real resources (labour, stuff). Money/debt is just a social construct, invented by us. So money should be used in a way to put the real resources as efficient as possible in place.
@wsxgfhccr 10 місяців тому
Money printer goes BRRR and welcome to the great Ponzi scheme called the modern economy!
@detocquevi11e 10 місяців тому
@@TheChrisaige "If you live in the US and see most national debt just being siphoned into car infrastructure and single family housing" .....or even worse, if you see an accelerating portion of the debt consisting of just servicing the debt.
@snowballeffect7812 10 місяців тому
We need a debt jubilee like we used to have. Just clear the books and reset like at the end of Fight Club. The debt holders are already fabulously wealthy; they can stop leaching off the poor for a bit.
@sav5127 10 місяців тому
I totally think you should include the Genie coefficient as a factor for the EE leaderboard
@Unknown-jt1jo 10 місяців тому
*Gini
@alehaim 10 місяців тому
Debt in itself is also a very funny thing when told through one story told during one middle school class of mine that went something like follows: A man comes to visit a town where he pays 100 euros for food and lodging for his stay. The owner of the lodging with that money pays his employee on the same day, who uses that same money to buy a new window to replace her broken window. The Window seller uses that money to then to pay for a an improvement to his window making machine allowing him to make windows faster than before. The machine seller uses that money to pay a 100 euro debt to the man who came to the town to collect this debt. The main point of the story is how a single note of money can through exchanging hands lead to a lot of improvements even if it returns to the original user of the same note.
@vincentfegley6068 10 місяців тому
One question, it's possible for 2 entities to own each other's debt. Could two countries, businesses or people who hold each other's debt cancel equal amounts of the debt held from both sides? Is that a thing?
@thecrazycapmaster 10 місяців тому
They’d have to negotiate the terms but I don’t see any reason they couldn’t do it 😅
@snakyjake9 10 місяців тому
@@ThomasVWormI think what he's saying is that me owing you $10 vs us both owing each other $5 is a very different situation, even if the total debt in both cases is $10.
@snakyjake9 10 місяців тому
@@ThomasVWorm the global economy can be very complex. It's valid to ask to what degree this type of debt exists without snarky remarks.
@royce9018 10 місяців тому
happens quite often, many countries keep other countries debt. China buys US bonds which is a debt.
@DaveSmith-cp5kj 9 місяців тому
No, because countries don't consider all their debt to be their responsibility. For example lets say a government agency A owes debt to you. If you try to go to government agency B to collect, they won't pay you. There is no direct organization of debt because the responsibility of settling the debt belongs to whoever initiated the debt, not necessarily which country they reside in. So you can have a situation where both countries owe the same amount of debt to each other but it never gets canceled out. However, this does not mean there isn't any loss of finance because in order to settle debts, countries print money which devalues the fiat. So now people who don't hold debt are essentially paying the debt of debt holders as their savings go down in value. This is why it is so hard to retire today while our grandparents could save literal pennies and be set for life.
@olgajoachimosmundsen4647 10 місяців тому
I still find it interesting that the USA stands for 25 % of the global debt, consisting of roughly 4 % of the world population. To me the US economy seems to be at some level a credit-card economy, where you always live above your means and trust that tomorrow will cover the bills in the end.
@CaillouThePimp 10 місяців тому
That’s the privilege you get when your currency is the world reserve.
@lordbertox4056 10 місяців тому
If at least it was spent on infrastructure or education instead of the army...but we all know how that is in the USA.
@glint6070 10 місяців тому
@@lordbertox4056 There are geo-political ramifications to that. The U.S doesn't have the luxury of drastically re-aligning it's military structure without global consequences. What would be ideal is fixing the wasted spending already going into infrastructure right now (for example, suburbia is hugely inefficient)
@zesky6654 10 місяців тому
The US is also vastly more wealthy than any other country.
@understanding.everything 10 місяців тому
@@zesky6654measured in USD ponzi 😂😂😂
@dadthelad 10 місяців тому
Can't wait for next week's video!
@jimrobinson4786 10 місяців тому
A financial guru in the US says "never borrow money to buy a liability, borrow only to buy assets ". Could this idea work for Government budgets? Our politicians have run deficits over and over. If the deficit spending was only for investments ( like roads ) would this work and what effect would it have? The guru is Dave Ramsey.
@Thecreatorshaq 10 місяців тому
Another great informative video.
@Termless 10 місяців тому
bro you posted this comment 2 mins after the vid was published...
@GKPIE 10 місяців тому
@@Termlessthey’re from the future? 🤷🏾♂️
@1996tre 10 місяців тому
Curious to know if the world decides to stop using USD what would happen to the debt.
@rawdawg69tothe69th 10 місяців тому
Could you do a video about the Austrian economics school of thought?
@riteshgupta4002 10 місяців тому
I have doubts about how purchasing real estate is not productive for the global economy. It's not like we are buying land from Martians. It is simply a change in hands of money which the seller will either use for productive investment, consumption, or other real estate and so on. Not to mention that that real estate which is never traded also goes up in value paving the way for homeowners to be more comfortable in investing more and consuming more.
@tiagoquental1029 10 місяців тому
It's easy to control unproductive debt, let the commercial banks go bankrupt and don't rescue imprundent investors when they don't manage their risk. If the SVB wouldn't been bailed out, we would be now looking at low inflation, stocks at reasonable prices and so real state. As long as everyone is saved at the end, nobody cares about risks, only greediness.
@jimmcneal5292 10 місяців тому
Yeah, and then economy collapses because of bank run
@DaveSmith-cp5kj 9 місяців тому
@@jimmcneal5292 All economic collapses have been because of government intervention in banking, not the lack of it. The Great Depression for example was caused by the Federal Reserve encouraging banks to accept risky loans such as to low income individuals who lacked the capital to cover the debt. This is what lead to the default of loans. SVB for example invested a huge amount of money into environmental "green" startups that had no grounding in reality, but they knew the politicians who would vote to bail them out wanted these investments to be made. It's a scam.
@duuplo 10 місяців тому
0:15 You mean the US is "the largest economy", not "the largest nation"
@Rochi47 10 місяців тому
I know you already did a video about South Africa, but considering the current crisis in the nation, I think you should make a remastered version.
@Ikbeneengeit 10 місяців тому
Great one
@GarageSupra 10 місяців тому
Random thing I read once, If you have $1000 to your name but are debt free, you are in the top 10% of richest people in the world
@ihavetowait90daystochangem67 10 місяців тому
Who do we owe our “Global Debt” to the Decepticons?!?
@ramunasgudauskas7582 10 місяців тому
To each other and private individuals. If you owed me a dollar, I owed your friend a dollar, and your friend owed you a dollar, that would be three dollars of debt. Debt is just cash that didnt swap hands just yet. You could cancel the entire debt thing if you just handed a dollar over the three of us right? It would be too simple. While there is 300t$ of DEBT There also are individuals like bond owners who are 300 trillion short in their pockets right now.
@oldvlognewtricks 10 місяців тому
The video literally explains this.
@ivailoruikov5558 9 місяців тому
Thank you!
@Kriss_L 10 місяців тому
How about a video on (US) student loan debt? Because they same people that say a college degree is needed for a good paying job are also screaming for the federal government to cancel student loans because people can't afford to pay them off. It's obvious that both of those situations can't be true.
@childofaether8733 10 місяців тому
Problem is not all degrees are equal and even among the highest paying fields, there's a lot of competition and it's not so easy to get that high paying job in your field (tech for example). No engineer making 6 figures will tell you they can't repay student debt, they all can and they all do it in 3-4 years and then get access to even better salary (6 figures) after getting that already high paying firsg industry experience. Problem is getting that first high paying job, and that many many graduates in many fields don't actually get access to high paying jobs at all because their field of expertise is just not that sought after. Factor in the issue of extremely high cost of living in highly populated areas and you got yourself a bunch of "technically middle class" Americans making 50,000$ a year but struggling to repay a 100,000$ debt. Although in general 95% of people overspend and could benefit from smarter spending and being more frugal in general, but that's another issue.
@Unknown-jt1jo 10 місяців тому
You say they're the same people, but they really aren't. Group #1 (people who say a college degrees is needed) doesn't have an agenda. They simply have an accurate understanding of how the modern economy works. A college education does usually (but not always) substantially increase your lifetime earnings. Group #2 (people pushing for cancelation of student debt) is typically young and on the political left. Sometimes they're those who failed to land high-paying jobs, despite having a college education (for example, because they majored in a low-paying field). There's also a larger Group #3 (people who support student debt cancelation, but don't actively push for it). These are people support debt cancelation due to a general sense that gov't should be doing more to help people. However, they usually don't push for debt cancelation themselves. They just support it passively. So, these are different groups of people.
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@robertgorin1002 9 місяців тому
Opportunity is a scarce commodity. I will partake in this; there’s no limit to what you can achieve in life (including success) if you put your mind to it. Luckily I stumble into this.
@StandingWhere 10 місяців тому
We don't owe this debt to ourselves. Very few people have investments in world debt. The people who do are the 1%. The owners of the world debt are the 1% who will get richer by it
@SimoniousB 3 місяці тому
After listening to this, and understanding more about what isn’t measured, it makes me wonder if a useful global economic model even exists with current assumptions.
@gabrieldta 9 місяців тому
I would loooooove to see next: "How is debt distributed among population? My guess is that the top 1% loaners account for some 90% of the debt; much like income inequality. Total guess, tho.
@FernandoPerez3h 10 місяців тому
The only reason why the usa is not facing a crisis is because they have US military bases established worldwide and maintain control over the Swift system. otherwise, they would likely experience significant inflation, currency devaluation, and an economic downturn worse than turkéy, lîbanon
@liversuccess1420 10 місяців тому
There's also the USD as a global reserve currency. But I would argue that even the military bases are an investment...they provide security in regions of the world where it is needed. I know that makes me sound like an imperialist; I'm not advocating the US use these bases to start illegal wars as it sometimes does. But most countries that host US military bases would much prefer that to having to dramatically increase their own defense spending. The US Navy, for example, helps control piracy in the Pacific and Indian Oceans, which benefits the global economy.
@rooneywalter7407 9 місяців тому
I feel one Of the greatest challenges that we first timers face in the ma rket is that we end up losing all we have, making it difficult to find ourselves back to our feet. My biggest advice is to always seek the services of a professional just like I did when I ventured into it for the first time. Big thanks to Jasmine Querida. I now make huge profits by weekly through her services while still learning to stand on my own.
@stop_bringing_me_up_in_goo167 9 місяців тому
Bots
@davidallen8611 10 місяців тому
This video is remarkably awesome
@iliatebenkov473 10 місяців тому
The dates on the graph at 8:48 are interesting to say the least
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