05-30-2021, 09:33 PM
Since 1821, 98% of countries that hit 130% debt/GDP have defaulted on their sovereig
<table> <tr><td> <a href="https://www.reddit.com/r/CryptoCurrency/comments/nnwpl1/since_1821_98_of_countries_that_hit_130_debtgdp/"> <img src="https://external-preview.redd.it/Ox_2dFZC21bGyNj_wAfm4O86X1SRPTmTUKunAkvV3l8.jpg?width=640&crop=smart&auto=webp&s=03fe0fcb63f261e534f8927069b0d7a91b29f1d1" alt="Since 1821, 98% of countries that hit 130% debt/GDP have defaulted on their sovereign debt. The US crossed 130% late last year. Govt monetary policy is no longer sustainable." title="Since 1821, 98% of countries that hit 130% debt/GDP have defaulted on their sovereign debt. The US crossed 130% late last year. Govt monetary policy is no longer sustainable." /> </a> </td><td> <!-- SC_OFF --><div class="md"><p>Since 1800, 51 out of 52 countries with gross government debt greater than 130% have defaulted on their commitments, either through restructuring, devaluation, high inflation or outright default. Japan is the only example of a country avoiding default despite having government debt greater than 130% of GDP, and Japan didnt solve their problems but rather just mitigated it without defaulting. </p> <p>​</p> <p><a href="https://preview.redd.it/pcyez784k4271.jpg?width=1286&format=pjpg&auto=webp&s=6a7b4a220a32e5aa3a555b6beccdc7999a241ccc">Sovereign debt defaults over the years (Source: Hirshman Capital's analysis)</a></p> <p><a href="https://fred.stlouisfed.org/series/GFDEGDQ188S">The US has already hit 130% in 2020</a>. And it is only poised to grow over time, with more and more debt being taken on in 2021. In historical terms, we are presently flying in uncharted territory. Will USA become only the 2nd country out of 53 to come out of such a high debt/GDP ratio without defaulting? </p> <p>Its highly unlikely that the US will actually default on its debt repayments, because unlike most other countries in the list above, most of global debt is today denominated in USD, and the US govt can print more and more USD to fulfil all their debt obligations. </p> <p>So what happens is that the value of USD will continue falling off a cliff. It has already lost a huge % (>90%) of its spending power over the years, and with government debt shooting up to uncontrollable levels, the value of USD will only weaken. And with that, the value of all your savings also goes down. The destruction of wealth. </p> <p>The only alternatives to escape this certainty i.e destruction of USD's buying power are real assets which are in demand, like gold, cryptocurrencies and real estate. While it is definitely possible that if the FED and US economy implodes, other markets including bullion and bitcoin/crypto crash together with it in the near term, but crypto markets are likely to see a very strong reversal because the fundamentals of crypto are the exact opposite of what the FED does.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/DetroitMotorShow"> /u/DetroitMotorShow </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/nnwpl1/since_1821_98_of_countries_that_hit_130_debtgdp/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/nnwpl1/since_1821_98_of_countries_that_hit_130_debtgdp/">[comments]</a></span> </td></tr></table>Kind Regards R
<table> <tr><td> <a href="https://www.reddit.com/r/CryptoCurrency/comments/nnwpl1/since_1821_98_of_countries_that_hit_130_debtgdp/"> <img src="https://external-preview.redd.it/Ox_2dFZC21bGyNj_wAfm4O86X1SRPTmTUKunAkvV3l8.jpg?width=640&crop=smart&auto=webp&s=03fe0fcb63f261e534f8927069b0d7a91b29f1d1" alt="Since 1821, 98% of countries that hit 130% debt/GDP have defaulted on their sovereign debt. The US crossed 130% late last year. Govt monetary policy is no longer sustainable." title="Since 1821, 98% of countries that hit 130% debt/GDP have defaulted on their sovereign debt. The US crossed 130% late last year. Govt monetary policy is no longer sustainable." /> </a> </td><td> <!-- SC_OFF --><div class="md"><p>Since 1800, 51 out of 52 countries with gross government debt greater than 130% have defaulted on their commitments, either through restructuring, devaluation, high inflation or outright default. Japan is the only example of a country avoiding default despite having government debt greater than 130% of GDP, and Japan didnt solve their problems but rather just mitigated it without defaulting. </p> <p>​</p> <p><a href="https://preview.redd.it/pcyez784k4271.jpg?width=1286&format=pjpg&auto=webp&s=6a7b4a220a32e5aa3a555b6beccdc7999a241ccc">Sovereign debt defaults over the years (Source: Hirshman Capital's analysis)</a></p> <p><a href="https://fred.stlouisfed.org/series/GFDEGDQ188S">The US has already hit 130% in 2020</a>. And it is only poised to grow over time, with more and more debt being taken on in 2021. In historical terms, we are presently flying in uncharted territory. Will USA become only the 2nd country out of 53 to come out of such a high debt/GDP ratio without defaulting? </p> <p>Its highly unlikely that the US will actually default on its debt repayments, because unlike most other countries in the list above, most of global debt is today denominated in USD, and the US govt can print more and more USD to fulfil all their debt obligations. </p> <p>So what happens is that the value of USD will continue falling off a cliff. It has already lost a huge % (>90%) of its spending power over the years, and with government debt shooting up to uncontrollable levels, the value of USD will only weaken. And with that, the value of all your savings also goes down. The destruction of wealth. </p> <p>The only alternatives to escape this certainty i.e destruction of USD's buying power are real assets which are in demand, like gold, cryptocurrencies and real estate. While it is definitely possible that if the FED and US economy implodes, other markets including bullion and bitcoin/crypto crash together with it in the near term, but crypto markets are likely to see a very strong reversal because the fundamentals of crypto are the exact opposite of what the FED does.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/DetroitMotorShow"> /u/DetroitMotorShow </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/nnwpl1/since_1821_98_of_countries_that_hit_130_debtgdp/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/nnwpl1/since_1821_98_of_countries_that_hit_130_debtgdp/">[comments]</a></span> </td></tr></table>Kind Regards R