The World Debt is it getting out of control

A few reading into the world debt makes me wonder how sustainable can this be for much longer. They’ve been a few predictions by some analytics that we are sleep walking into the abyss, just cant work out what this would mean for investors in the future

https://data.worldbank.org/products/ids

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I don’t know enough to have informed view but my key thought/opinion is around interest rates. Whether companies, countries, or individuals debt, if interest rates rise then this will have a knock on effect. Such as debt laden companies with poor earnings will dive in value or cease to exist as they cant borrow as easily and it is harder to pay down current obligations.

One thing is key, whether its money of the future is fiat, crypto, gold, insert anything that is just a tool to buy goods, services or assets. So if you can own shares in great companies, some property, other assets then you will have the best chance to weather storms.

Also diversify the geographical weightings your shares, Buffet often says just whack in S&P500 index and great, but he is bias that the US of his life will continue, look at Britain, once a super power now a shambles.

So what are my investment plans for shares? Multinationals or companies that sell to many markets not just UK, or just US. This could be financials, pharma, tech, consumer goods. Also as inevitably lots of companies are US in our portfolios, I am making sure I have a good exposure to China as if US fails its because China soars, or vice versa.

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The description is at the bottom Gouverment debt per gdp ration but this is a bit outdated now but still useful.

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UK at 88%. not as bad as it could be :rofl: though after all these furloughs and lockdowns it’s likely at 96% now.

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Who owns UK Debt? The majority of UK debt used to be held by the UK private sector, in particular, UK insurance and pension funds. In recent years, the Bank of England has bought gilts taking its holding to 25% of UK public sector debt. Overseas investors own about 25% of UK gilts (2016).19 Aug 2020

Debt is high as the economies have shrunk, best off waiting to see what this year and next has in store for us.

Seen as the currency is now worth less due to printing, the debt will also become smaller as inflation kicks in.

Found it!

Have a look at this interesting interest rates over the years!

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Hmm I am no expert but looking at this chart I see either global debt crisis or negative interest coming. I mean we are at 0 interest. Any increase would trigger stock market crash!

Yea it’s all interconnected.
In Denmark they have 0% Mortgage for consumers!

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And inflation with Germany that is out of control.
This is purely down to South European debt though and will have to self correct at some point.

They all have target2 to thank for that bomb shell

It’s a World War scenario for the economy right now, and we know what comes next… multiple years of recession.

Bitcoin FTW! :rocket:

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If it was still 10k I would agree with you but the recent rally has already priced in the potential money printing limits. If it drops back again then I’m jumping on it

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Yeah but there’s always a way for governments and central banks to push the debt to the next generation and so on, that is how it has been for decades now the debts keep rising and they push it over to the next generation and the circle continues so I don’t think the sky is falling, I prefer to bet on growth but if a hard global crash comes it will be a good thing like a reset of some sort.

take notes and set a reminder for 31st December 2021… Bitcoin price will be 80~100k

I wouldn’t bet against it that’s for sure but it has tanked in the past after a sharp rise and I don’t want to lose 20k.
I will watch and wait for now but I will have to get in at some point

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Nice share. Do you have the source also?

I didn’t understand that, can you elaborate?

Can you explain better this?

@RLX

Source

Chart: Visualizing the 700-Year Decline of Interest Rates

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@RLX

German inflation:

https://www.destatis.de/EN/Themes/Economy/Prices/Consumer-Price-Index/_node.html

The south of Europe is already borrowing at lowest rates ever

see source:
https://tradingeconomics.com/bonds

and for a more detailed view

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I was referring to house price inflation which is obviously rife in Northern Europe atm mainly Germany due to southern European debt not being paid.

https://www.aei.org/economics/international-economics/target-2-trouble-for-the-eurozone/

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