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Total World Debt Tops $100 Trillion

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http://www.zerohedge.com/news/2014-10-29/fed-pauses-printing-total-world-debt-tops-100-trillion

If, as Lacy Hunt explains "debt is an increase in current spending in lieu of future spending," then we have some 'un-spending' to do...

20141029_100t_0.jpg

Anyone got global savings? Surely that should be at around $100tr mark?

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http://www.zerohedge.com/news/2014-10-29/fed-pauses-printing-total-world-debt-tops-100-trillion

If, as Lacy Hunt explains "debt is an increase in current spending in lieu of future spending," then we have some 'un-spending' to do...

20141029_100t_0.jpg

Anyone got global savings? Surely that should be at around $100tr mark?

Surely its that graph in conjunction with peoples ability to service it that demonstrates whether it is unsustainable or not.

It's another "woooo here's a really big number it must be really bad" graph that doesn't have any supporting data to put it into context.

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http://www.zerohedge.com/news/2014-10-29/fed-pauses-printing-total-world-debt-tops-100-trillion

If, as Lacy Hunt explains "debt is an increase in current spending in lieu of future spending," then we have some 'un-spending' to do...

20141029_100t_0.jpg

Anyone got global savings? Surely that should be at around $100tr mark?

You will never guess what I have just found down the back of the sofa.

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Debt is someone's else's asset. So someone is sitting somewhere on a yacht in the Caribbean sipping champagne receiving the interest.

However, the low low interest rates, indicate this person needs much more debt to get the same income as before. If they raise interest rates, we'll get default. We maybe nearing the endgame - but that still could be 10-20 years out.

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To put it in context, global GDP in nominal $ is c. $77trillion

its a silly context when more debt adds to GDP...

Its the same as taking £10 from my left pocket and spending it to my right and add up the £10 I have with the £10 I moved and saying Ive now got £10 of GDP.

I have produced nothing.

but I have £10 of GDP, and I can borrow against that...lets add that £1 of borrowing...Now Ive got £11 cash in my right pocket....but, what is acheived....exactly?

Edited by Bloo Loo

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Debt is someone's else's asset. So someone is sitting somewhere on a yacht in the Caribbean sipping champagne receiving the interest.

However, the low low interest rates, indicate this person needs much more debt to get the same income as before. If they raise interest rates, we'll get default. We maybe nearing the endgame - but that still could be 10-20 years out.

I think there is a very strong link. See the other thread today showing that the number of billionaires has doubled since the financial crisis.

Increased debt results in increased money supply and that money ends up somewhere. It certainly has not appeared in my bank account.

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its a silly context when more debt adds to GDP...

Its the same as taking £10 from my left pocket and spending it to my right and add up the £10 I have with the £10 I moved and saying Ive now got £10 of GDP.

I have produced nothing.

but I have £10 of GDP, and I can borrow against that...lets add that £1 of borrowing...Now Ive got £11 cash in my right pocket....but, what is acheived....exactly?

Following your logic then it makes no difference whatsoever that there is $100trillion of credit in the world does it.

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Following your logic then it makes no difference whatsoever that there is $100trillion of credit in the world does it.

Maybe it doesn't. I'm becoming less and less convinced that it does.

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I watched the film Margin Call last night about the beginning of the crash. Good film. Quite an eye-opener. Debt they said allowed us all to live beyond our means made possible by shifting bits of paper between buildings. In saving the arses of the few they shafted the many and they many not even in existence.

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Apparently Japan Central Bank is going to increase its purchase of ETFs with a new round of QE...

One wonders WHERE THE FRACK ALL THESE FRACKING ETFS COME FROM YOU STUPID FRACKING BANKERS!

How many NEW ETFS THIS MONTH?

These financial scams are like the Chinese Population jumping off a cliff 4 abreast...in spite of getting rid of them at the rate of thousands per hour, THEY ARE STILL PILING UP.

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Following your logic then it makes no difference whatsoever that there is $100trillion of credit in the world does it.

GDP is supposed to be a measure of production. If money supply is rapidly changing (though debt issuance or any other mechanism) then the assumed correlation between production and the value of monetary transactions is lost and it becomes a meaningless measure.

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GDP is supposed to be a measure of production. If money supply is rapidly changing (though debt issuance or any other mechanism) then the assumed correlation between production and the value of monetary transactions is lost and it becomes a meaningless measure.

Come again?

Global output is simply the sum of output of each country - here's the World Bank's number to 2013 (so a few trillion short of the $77t I posted above) so you can see for yourself. It's in nominal dollars but I'm sure there are PPP versions elsewhere. My point was that $100t of total credit without any context doesn't convey much (any) information.

http://data.worldbank.org/indicator/NY.GDP.MKTP.CD

Edited by R K

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Come again?

GDP is an indirect measurement, a bit like how cars show speed on the dial based on wheel revolutions based on assumed wheel diameter. Bloo is essentially correct in that GDP is a meaningless measure in a debt based economy in the same way a speedometer would be on a car with continually varying wheel size.

Granted that a debt measurement needs some context but GDP isnt a good one because of the positive feedback loop between debt and GDP.

Edited by goldbug9999

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GDP is an indirect measurement, a bit like how cars show speed on the dial based on wheel revolutions based on assumed wheel diameter. Bloo is essentially correct in that GDP is a meaningless measure in a debt based economy in the same way a speedometer would be on a car with continually varying wheel size.

Granted that a debt measurement needs some context but GDP isnt a good one because of the positive feedback loop between debt and GDP.

Nope, still not getting it.

Something about GDP not being a good measure of output because of the size of wheels on a speedometer?

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Nope, still not getting it.

Something about GDP not being a good measure of output because of the size of wheels on a speedometer?

GDP assumes a close correlation of monetary transaction volume and economic output. Something that hasnt been true of any modern economy for quite some time.

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I watched the film Margin Call last night about the beginning of the crash. Good film. Quite an eye-opener. Debt they said allowed us all to live beyond our means made possible by shifting bits of paper between buildings. In saving the arses of the few they shafted the many and they many not even in existence.

But it doesnt though, does it. We can consume only what we can produce regardless of the monetary system.

All debt money does is transfer the sum of that productivity from the producers to the issuers of debt (ie, banksters) If anything, in doing so, debt reduces our means by acting like a tax on producers.

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Nope, still not getting it.

Something about GDP not being a good measure of output because of the size of wheels on a speedometer?

Its not a good measure because it measures what the Government cares to add to demand..it can therefore simply borrow more to move the GDP positive...nothing new is created except perhaps a butter mountain, a paperclip mountain, or more likely, a mountain of ipads in managers handbags.

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Its not a good measure because it measures what the Government cares to add to demand..it can therefore simply borrow more to move the GDP positive...nothing new is created except perhaps a butter mountain, a paperclip mountain, or more likely, a mountain of ipads in managers handbags.

A prostitute pile?

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Come again?

Global output is simply the sum of output of each country - here's the World Bank's number to 2013 (so a few trillion short of the $77t I posted above) so you can see for yourself. It's in nominal dollars but I'm sure there are PPP versions elsewhere. My point was that $100t of total credit without any context doesn't convey much (any) information.

http://data.worldbank.org/indicator/NY.GDP.MKTP.CD

There was a time when economic output was measured with physical output, things like how many tonnes of steel, coal, barrels of oil etc where consumed in a given year. It seems that this would be a more realistic figure to use. It might be interesting to compare something like barrels of oil consumed per person per year over time. This could be a better measure than GDP that avoids being distorted by debt.

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