"I did answer your rhetorical question in detail."
LOL...no you didn't. You reformulated it to fit an answer you wanted to post complete with examples of how past fears were realised to be true so the future must now be clearer..LOL
To answer my question you don't need graphs and you don't need to pore your way through financial history either. You just need to be able to do numbers. It is simple , does the cost of finance have a bearing on the ability of an entity to repay it's level of debt..that's it .That's the question. The obvious answer is yes and from those graphs you posted if you simply post one showing a debt level with no reference to the cost of servicing the debt then the graph is not very useful except perhaps as scare tool. The next question therefore is will it be possible to service the level of debt shown on that graph and that depends on how you intend to deal with that debt. You can indeed try to repay it in it's entirety ,or you may choose to mitigate that level of debt to match your ability to service it. Your ability to do that depends on your leaverage to do that ,but it helps if you have the worlds reserve currency in your pocket and your ability to mint more of it.
Now I don't know the outcome and I don't mind saying that,but likewise I really doubt anyone else knows either.
It does not take much by way of power of observation to see we have quite a number of people who by experience and qualification should be in a position to analyse the issues at hand. Likewise it is clear that those people have ,not just views of a different hue ,but views that are so disparate they don't belong on the same planet. Now when I see that what I know is we have people who are falling into the trap of arguing about something to which there is no immediate answer.Therefore when you cite probabilities you do not cite probabilities at all because they are implicitly unquantifiable. What you do and all you do is try to put into words your own beliefs and using words like "probability" is no more than a mechanism to try to give those words and belief some validity.
Statements about "debt to infinty" are simply red herrings that draw away from the question trying to support your beliefs. It isn't anywhere in the issue that debt goes to infinity is it ? No, it isn't. There is a specific level of debt which as % of GDP is at a record high ,can it be serviced given the level of cost of finance and the ability of the debtor to 'renegociate' ,or change the terms on the debt. That's the central question and we'll find out in the fullness of time the answer,but right now talking about the answer and probabilities is nonsense.
“Those who cannot remember the past are condemned to repeat it.” George Santaya
You describe actual data and actual past occurences as "reformulated", "past fears".
All debt financed asset bubbles (aka ponzi finance) have burst once the total amount of debt has surpassed the ability and willingness of borrowers to borrow and/or the ability and willingness of creditors to lend money.
Similarly, the graph of diminishing GDP growth for every additional one currency unit of debt created is clearly suggesting that there is indeed a limit to the total amount of debt.
Having a world's reserve currency is now a red herring. I recommend that you familarise yourself with the latest news.
"Ability to mint". As you may not know, over 97% of money is created by CBs as interest bearing debt.
I don't understand your paragraph about probabilities. It is very simple, we have plenty examples of debt financed asset bubbles that have occurred in the past. We don't know what could happen in the future but we do know what happened in the past. Therefore, I disagree that they are implicitly unquantifiable.
Ironically, many governments are implementing similar aggressive fiscal policies to that in the 1930s (USA) and the 1990s (Japan). We know of the outcome of these fiscal policies.
Essentially, my position is that it is not possible to, for example, borrow £200,000 at 1% pa whilst having an income of, for example, £10,000.
Extreme debt gearing is ponzi finance. Totally unsustainable and intrinsically fraudulent.
It is also not possible for a country that has average GDP growth of, say, 2% pa over the cycle to borrow at, say, 4% pa. In the real world,
the maths of compounding ultimately caps the total amount of debt. This is why the graph of diminishing GDP growth is completely logical.
It is interesting that you say "can it be serviced given the level of cost of finance and the ability of the debtor to 'renogiate' (sic),or change the terms on the debt". Yes, this is ponzi finance. The scheme will collapse under its own weight as investment slows and the borrower starts having problems paying out the promised returns.
I understand ponzi finance but you don't appear to.
If you still disagree with me, put all of your assets into a 30 year fixed rate bond issued by any debtor running a ponzi scheme and hold it to maturity.
Unsubscribed.
