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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 379.91

+0.4%

Nov 11 4:00 PM EST

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Arran Yuan

Joseph Silent

To: Joseph Silent who wrote (145317)	1/11/2019 10:14:08 AM
From: Horgad	2 Recommendations Read Replies (2) of 217699

As a starting point, historically, countries borrowing from other countries get in trouble about the time that their debt to GDP exceeds 90%. At that level of debt, there is almost a drag on growth, reduced growth makes it harder to pay back the debt, difficulty in making payments causes credit ratings to go down and interest rates go up, and a downward spiral ensues. Countries that borrow mainly in their own currencies (like the US) are a different story. Since the debt is denominated in their own currency, they can pay it back by increasing their money supply. This works until it doesn't and at some point a currency confidence crisis ultimately ensues. These cases seem more or less impossible to predict by looking at just debt levels (see Japan in the link for example). By this metric, the current state of many of the world's economies is not looking healthy: tradingeconomics.com

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