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To: elmatador who wrote (131279)	3/3/2017 3:10:13 AM
From: Elroy Jetson	Read Replies (1) \| Respond to of 217528

That's the false prosperity created by a credit bubble. If the debt creates a positive return, the debt to revenue ration can actually decline as the debt load increases - which is what you want to happen. When the money gets invested in something like the World Chinese Trust Building in Los Angeles which produced no income for 13 years and a small capital loss when it was finally sold, any debt taken on to originally create the capital which built that building certainly increased the debt to income ratio. That's the problem in China's economy - there's not enough market feedback to guide investment decisions in a way which increase societal wealth. But once the global economy begins to deteriorate and deleveraging starts, as we entered in 2006 - 2008, governments have to start making short-term decisions to prevent a total collapse. Remove some of the excess pressure but no more - and in China that required the subsidization fo steel companies and building 'ghost cities'. If that spending tides them over to better times, then it was money well-spent. But if the bad times continues, then it only made the problem worse. It's a gamble.

To: elmatador who wrote (131279)	3/3/2017 10:21:46 AM
From: Maurice Winn	1 Recommendation Recommended By James Seagrove Respond to of 217528

The politician will always borrow because their re-election problem is now and the debt will be due in a decade. NZs prime minister decades ago explained that people wouldn't know a deficit if they tripped over it. Spending big heaps of borrowed money can make people feel wealthy. New Zealand now has BIG heaps of borrowed money to "buy" houses. Same as in USA a decade ago. With interest rates at 3 percent people feel wealthy. In the 1980s they did it with shares in a giant financial engineering scam. Big money was made on paper. Until the market crashed and to their sorrow hordes of people learned about good times borrowing. Neither a borrower nor a lender be ... Hmmmm note to self ... you are at present a lender. Buy gold. Or perhaps oil from which gold is made. Or maybe land which is hard to steal though governments easily confiscate it or tax it which is the democratic means of theft. Mqurice

To: elmatador who wrote (131279)	3/4/2017 4:03:57 PM
From: Heywood40	1 Recommendation Recommended By GPS Info Respond to of 217528

"You do not pay debt, you manage it." Corollary: "If you manage it well, you prosper, if you manage it poorly you fail" When I became old enough to have credit, my older brother advised me to never borrow money for anything that does not appreciate in value. While I didn't always follow his advice strictly, it did keep me from making costly impulse buys, or buying new cars for decades when I couldn't afford them. It also, in turn, allowed me, without fear, to borrow large sums to purchase pieces of real estate in markets that were going up significantly more than the rates I was borrowing at. Managing debt well has been one of the keys to prosperity for me.