Countdown to a Debt Crisis

Is a global systemic banking crisis looming? Emil Kalinowski, host of Eurodollar University, provides color on several countries that have tripped the financial crisis circuit. Using BIS data and his own research, Kalinowski explains why a massive deleveraging campaign in countries’ private debt sectors is needed to avoid a “Fourth Turning” era of destruction in the global economy. Despite crisis indicators arising in several highly stable and developed countries, the BIS data provides a starting point to outline the warning signs of when global household sectors and debt servicing ratios go haywire. Interviewed by Maggie Lake on October 4, 2021.
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Countdown to a Debt Crisis
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[@allencoffland1685]

glad to see Emil made it to the big time, getting interviewed instead of interviewing.

[@ryanbruh752]

Real vision is a crypto ponzi shilling channel though.

[@Applepie409]

@@ryanbruh752 As long as you are aware of that it doesn’t really matter.

[@bilyonarelifestile2226]

Emil should have been a pilot or a psychotherapist. Very calming voice.

[@aaronwahle8230]

Sign this guy up for regular interviews please!

[@garygrimes8506]

Emil is THE MOST underrated macro/financial you tubers!

[@Jen-po3wz]

He is brilliant!

[@c39v26]

He is on the way up,top notch!

[@motgbg]

He is definetely the funiest :D

[@MJackB]

Love it when someone points out the unchanging and predictable nature of human behavior. Love it. Need more content like this not the fluff on this channel. Brilliant

[@19battlehill]

This is not human behavior --- THIS IS BANK and PROPAGANDA ORCHESTRATED. Households are NOT governments and unlike a government who is on a fiat system can always create the money it needs. HOUSEHOLDS can't do this and at some point the interest on what they owe and house prices will NOT be able to keep up --- it all GOES DOWN. NOT by accident ---- by banker design. READ the book 200 years of Financial Crisis and Brief History of Doom. IT is a story about corrupt BANKERS.

[@MJackB]

@@19battlehill I dont think you were following the video. youtube has created armies of ppl that do not understand

[@vincentyeo88]

When they pump up the market and keep on saying this time it is different, you'd best be prepared for a crash.

[@rongallipoli7701]

New Zealand is deep into a housing bubble. Negative real yields on investment properties, price-to-income ratios through the roof; beyond anything seen in Ireland or the USA pre-2008. There's a supply problem that has sustained prices, causing some to say it's not a bubble... but the bubble level of *private debt* is there nonetheless.

[@tylerk7577]

Same here in Canada. We are apparently 2nd in the world (beyond New Zealand) for the largest housing bubble with debt-income ratios

[@ericparadis7882]

@@tylerk7577 the population is subCERBient to it all.

[@michaelmcgarrity6987]

I had no idea. TY for update from NZ.

[@method341]

That's what happens when you elect a Socialist government.

[@michaelmcgarrity6987]

@@method341 Polls indicate a turnover in Congress in November Elections. There's a big mess to clean. A couple Years.

[@brittburns9582]

Great show. I"m from Canada and I had to laugh that the only indicator we did not trip was the housing one. Anyone in Canada knows that the housing prices are an out of control train wreck. The BIS normalizing this shows just how dire the situation is. There's a Canadian macro show that sheds more light into this, The Loonie Hour. One of the things that made sense though is the inflows of capital as many houses are purchased for cash. (This is from conversations with real estate agents) Emil any information that would be Canada specific I would be happy to research. Love your work on the eurodollar with Jeff.

[@VictoriaPorscheGuy]

On the ground here in Canada: Trust me, we also tripped the property bubble checkbox in the last 12 mos. 30% growth y/y.

[@Canadian_Eh_I]

I cant see how its not a bubble here in Canada. If the rates go up even slightly there will be massive defaults

[@r.s.334]

I'm Canadian too and I can't believe these prices. How can you get in the market at a young person?

[@nee-grow]

Yeah what a coincidence that Canada has the strictest mandates during a time when they're at the highest peak of a systemic collapse and banks freezing accounts. Somethings brewing for sure.

[@Canadian_Eh_I]

@@nee-grow ding ding ding. I've been saying this for a while, some of this is about controlling the populace, especially during an economic collapse

[@coliniveson2122]

Huge fan of Emil and his podcast with Jeff snider, smart and a calm, rational thought process. Thanks RV great interview.

[@Shawnimal]

The constant hair flips-tosses and jazz hands were absolutely fabulous. Distracting, but fabulous.

[@williamjenkins7562]

So what I get out of this is that money is debt and debt is not taxable, therefore if you want to be wealthy then borrow as much as they will loan you. Money is created when you borrow from the bank and debt is created at the same time... Wow, what a brilliant scheme!

[@mkwillis123]

I spat my coffee when he said New Zealand has a popular PM..🤣

[@kevinkelly1875]

Emil and Jeff are national truth treasures. Thank you guys.

[@andrewshantz9136]

The problem Is we’re discussing scary things but Emil’s voice is very soothing so I’m having cognitive dissonance.

[@aleksi9470]

So in Sweden and Norway it’s common to take a so called ”forever loan” to buy yourself a valuable house for example. People pay just tiny bit of their monthly income to cover their loan in a span of 60 years or even more. Because they are a welfare state (secure jobs, great benefits if you lose your job and a whole lot more extra things to help their citizens) the risk of people not being able to pay their loans is super low. Also interest rate in these loans are fixed and low so if there were trouble coming people just keep paying the same amount as usual.

[@petarz9029]

Emil's channel is a gold mine, and deserves a lot more attention. I highly recommend it!

[@bexcarvallo26]

what is the channel?

[@vindiesel5466]

@@bexcarvallo26 euro dollar university dear

[@halbrooks4654]

Gold mine for what ? Rabbit holes of nebulas theoretical abstractions and economic history trivia.

[@s.l.8221]

the guy is with Peter Stiff, the guy who predicts a crisis since before you could walk, yet nothing has happened.

[@almostastar2]

I always love listening to Emil and Jeff. Thanks for breaking down this great info from the BIS Emil!

[@sointu123]

SWEDEN: Sweden has mortgages with extremely long run times, so essentially people are not expected to pay them back during their lifetime. This has been going on for a long time and they have tried to tighten the requirements a bit (e.g. pay-back time a maximum of 105 years, amongst other changes). It would be very interesting to hear if this could have anything to do with it even though it is nothing new. I'm not from Sweden, so don't know the situation very well.

[@andreas8185]

I'm Swedish. Yes sointu100, it's mainy due to the housing market. There´s a housing shortage in the more densily populated urban areas, university cities and centers of economic activity in Sweden - maily due to price regulations in rental housing, building regulations, massimmigration and urbanisation. People tend to buy homes instead of renting because of lack of availability. The Government sponsors this by 30% tax deduction on interest payments. Since a few years back there is a goverment regulatory requirement to pay of morgage by 1-3 percent each year until your loan-to-value ratio is below 50%, but that payback-demand was paused during the pandemic. Home prices have continued to increase. If Riksabanken, the central bank, increases key interest rates and go from QE to QT it will slow down the economy substantially and be negative for home prices, but I'm not sure it will cause a big crash or bubble to burst.

[@sointu123]

@@andreas8185 That is interesting! Always nice to here first hand knowledge!

[@michaels4255]

So when the bubble expands long enough to become the new trend, it ceases to be a bubble??? Not sure I agree with the BIS reasoning on this one!

[@rustyyb8450]

Adam Smith says when a country owes unpayable debt to itself, the problem is solved with inflation, devaluing the currency.

[@bash-shell]

Emil is a star and fantastic guest to have on regularly!!!

[@Index-o1234]

Bright Individual, detailed anlayst. A summery of Pro's and Con's moving forwards would have been insightful.👍🏻

[@MehdiSyed456]

Very knowledgeable guest. Enjoyed the interview!

[@tomfool43]

My first encounter with Emil, what a great interview!

[@dogefromthefuture]

Such a great speaker. Keeps it brief. Timing is wonderful. Doesn't get too manic, just a cool cucumber. Stays on track, keeps it up beat. I really like this guy already 👍

[@gunarannders7797]

Emil and Jeff are great. Always educational and thought provoking.

[@halbrooks4654]

And mostly wrong, I'm still waiting for all the deflation/ disflation coming that they predicted most of last year. That's what you get.from acedemic ,overly complicated theoretical perspectives of how the economy is supposed to function. Never got a glimmer of useful information that transpired into actionable trading advice. Jeff and Emils high brow rhetoric is great for all their psuedo intellectual followers but it's all mental gymnastics and offuscation.

[@gunarannders7797]

@@halbrooks4654 Whoah, that comment has me doing mental gymnastics. Talk about high brow. I get your point on inflation. Snyder has clarified the technical distinction he's making, but higher prices do scream inflation.

[@Gitman333]

The Corruption of Man is Human Nature. Each generation takes short cuts, sometimes unethical in its expediency. And this is why things repeat.

[@advocate1563]

I call it hubris

[@manishsrivastava2992]

Great interview, Maggie and Emil. Looking forward to the sequel.

[@carstendursteler9616]

Great interview, thanks so much! Did i get it right, that iIf in one Country, just one of the 5 indicators are triggered that there a 50% chance of a financial crisis Within the next 3 years? So the likelihood is by far much greater by so many countries triggering more than one, is much higher right? Greetings from Germany

[@dantrcka8966]

Great interview Emil. Is it possible that the cross border investment is triggering residential prices going higher and that in turn is somehow skews the total debt to service ratio as well as the household debt service ratio? What I have noticed is that countries that you were surprised by, are also resource rich countries, and just as happened following the great financial crisis, the subsequent commodity boom triggered appreciation of Canadian dollar that became on par with the USD and even surpassed it for few years. Likely we will witness this again and perhaps investing into Canadian, etc housing markets may have been a way to play this rotation followed by a move into the commodity equities and then rotating back into the USD and cashing in two times on >20% Fx along with commodity gains. Please let me know your thoughts. Thanks

[@patheticprepper4496]

Investing in canada..Canada... lol

[@nateo6806]

Emil and Jeff are my heroes.

[@LeaPustetto]

What an excellent interview. Highly knowledgeable. The bubbles will pop. Eventually. Thankyou.

[@henrymiecz8566]

I'm in Canada and I can guarantee Canada's residential real estate is totally tripped and the sensor destroyed. No way anyone can afford homes thats why the supply is so low because everyone is terrified to sell what they have.

[@raw-bot9251]

Same in Australia

[@brittburns9582]

I had a laugh at that too. I"m in Canada and the housing is crazy.

[@stephanied6014]

The avg home is 14x the avg household AFTER TAX income.

[@laurakryzanowski3193]

I love Emil... He is witty... Intelligent... Well-rounded... Delightfully animated and unique...

[@alotmorefarms8242]

Toronto Market insane Canadians moving out Chinese and wealthy Indians moving in.This is going to humble the Canadian population who is praying for interest rates to stay low.

[@azurenk3549]

Excellent interview! Thank you

[@velisvideos6208]

The prudent Scandinavians had a huge crisis in early 1990's. May be time for a replay.

[@DonFather]

Exactly what I was thinking. After the Lehman crisis, are the ratings agencies even relevant?

[@Wapniak]

Congrats Emil 🔥🔥🔥

[@bastion9514]

I loved this interview, looking long term for risks potentially looming over the horizon is such an important discussion and a deep dive into this topic is REALLY REALLY important - more please team Well done & thanks Emil

[@nevilletaylor7654]

It is important, do we sit on cash like Buffet, do we buy the dip or get out of Banks and buy gold, this Emil seems to have done far more research then I've heard from anyone else on this question of when the crash is happening

[@jojorider812]

Real Vision Maggie and Emil Great Show !!!! Thank You and Please bring us much more of this type of content.

[@miguelmachado3259]

Emil is a great thinker and communicator. The case of public debt ... States have more degree of leverage as debtors - tax more, "print", restructure with creditors (parasites))) which are not interested in the death of the State ... Private debt ... less degree of leverage as debtors - workers can't unilaterally raise their salaries, nor investors decide on their returns, ... creditors become more predatory.

[@sondre2477]

As a Norwegian I can mention that the real estate markets have been booming. Not just post Covid, but several decades back. The government often express its concern over Norwegian household debt. Not just housing debt, but also credit debt. The weird thing is that Norway is one of the winners in this energy crisis, though export of oil, gas and electricity. Great video! Best regards from the North.

[@janinevernon9561]

Thankyou for the graphs. I'm in Canada; there are multiple cash offers on properties in Canada now - rent is out of control. People are borrowing on the secured LOC to make ends meet. People are paying (mortgage/rental) 50% or more of their income for housing now. Unsustainable in my view! Canada is on its way to despair, particularly when interests rates move up. Any downturn or job loss in our economy will put many upside down. A big surge of millennial families/children purchased in past 5 years. Our Child Tax Benefits are very generous 619/child per month. Helped make housing more affordable. Not now I'm afraid. Our purchasing power has been cut by 1/3 due to Pandemic.

[@jansabela5291]

Yeah, here in Czech republic the people went NUTS during covid and start buying all the houses(some villas away from cities marked up 50% during covid). Plus government went nuts with the stimulus.

[@alankern9490]

Now this is the quality I come for… had to go and follow Emil on Twitter after this.

[@elchikoadyl7410]

Emil fan here

[@jaredcantlon252]

Has Emil published this data by country? I’d love to see where Colombia ranks

[@deanelleman6611]

Great job Emil. BTW, think about a Windsor knot.

[@intienergia1]

He's really got the hands going, fits right in on Realvision.

[@das250250]

The answer about foreign flows in NZ is it has become an isolated escape zone ,has enough food production and self sufficient .real estate from foreign ownership

[@conduit242]

Yin unleashed. Magnificent.

[@thomaskauser8978]

The miss from the rating agencies of what AIG was doing during GFC can only compare to the miss of the collapse of Soviet union?

[@favjr]

Peter Lorre. With hair. Love Eurodollar U, though. Everybody loves to talk about public debt, because it easily measured. And doesn't predict anything in any human time frame. Nobody talks about the private debt they can't measure. Which is what matters, because its the marginal actors at work. This is probably the most interesting content that RV has put out in about a year.

[@jax-sx9pk]

Great interview Emil! It was a pleasure listening to you speak. I will be sure to check out your channel. I would love to see the heat map!

[@veerenchithriki2803]

Are you in Jacksonville

[@kennethbaird968]

The problem with the rating agencies it the company pays them to rate their company and there is no penalty given to a rating agency for incompetence they are paid to give the company the result the company wants or the don’t get the work.

[@Canadian_Eh_I]

This guy is super smart, liked the interview.

[@badaaben]

What a brilliant guy, absolutely love him.

[@fredrikvp7148]

For Sweden it is easy to explain. Government debt is very low, becourse taxes are very high. The only way you can lower your tax is to borrow.

[@dm8411]

This was great. Thanks so much for this valuable information. Would love to hear what he has to say about commodities. Have to say I am surprised not to hear Australia trigger any warnings. I would of thought the cross boarder claims would have triggered a warning. I think currently its at 40%?

[@BurhBurhBurh]

His specialty is money and debt not commodities, you probably know more than him.

[@hans.henrik.eriksen]

@@BurhBurhBurh How can you be so sure about that? I remember Emil said he did work within the metals and mining sector.

[@RR-qj1ji]

Props for speaking up.

[@rocking1313]

Emil is a fantastic guest ! Australian banks look like leveraged REITs these days, no?

[@katherinehighsmith8469]

Emil, thank you for your lessons! Your sincerity in educating is refreshing . I loved seeing Jane Eyre on your book shelf - confiming to me you really are a kind and sweet soul! One of my favs!

[@jasonclement6305]

Legend.

[@kates5994]

Thank you for introducing us to Emil so informative and interesting and understandable.

[@Mike-le6ed]

Really enjoy Emil and Jeff. Ty for your work.

[@sc3639]

Private debt comes down regularly? Sooo. It is the corporate debt that causes crashes imo. I am just a dumb bricklayer though so what do I know.

[@michaelmcgarrity6987]

I'm still trying to wrap my head around the Euro Dollar Concept. Emil has a great show no matter the channel.

[@Rnankn]

It is a little strange that the operationalization of crisis creates a profile where a few indicators are usually present. It seems further unlikely that the cases of crisis are so numerous and frequent. If you want to understand systemic risk of financial crisis, you probably need to understand what makes the structure of financial capitalism risk-prone. It should quickly become obvious that institutional changes within the global monetary system financialized the economies of North America and Europe, inflating sectors where capital could seek refuge, while lowering capital controls. The system is not at risk of crisis, the financial system is a crisis. The question is how did these economies manage to avoid a collapse for so long?

[@BrazilBro_]

Emil 🎉🎉🎉🎉 started following you a few weeks back and loving the information you and jeff provid!

[@1Bob4All]

Individuals in Norway take on a greater debt when buying a home. Up to 50% of an individual's paycheck may go towards a mortgage each month. Unlike Sweden, which may offer 60 year mortgages, the longest term mortgage which I know of in Norway is 30 years.

[@rohitjayasheel]

Nice discussion. Australuan housing Bubble is humungous as well.

[@etechconnect48]

So easy to listen to logical investment analysis. Bravo !!! Worth every moment.

[@philnewpower]

Emil! The 'chilled Economist'

[@davg1743]

Great interview, Love your work Emil! Get Emil on more often!

[@dhagos]

Canada's demographics have changed drastically over the past 15 years, so you may have to make an adjustment to the long term trend. We've used immigration to build our 20 to 40 year olds. I would imagine younger individuals are more capable of having higher debt to income as their income grows faster (Canada is reaching the point where the next wave of Canadians turn 39, which is where incomes typically start to stabilize). There's also the rate of population growth which continually brings in a a source of debt free income earners when done through immigration of post secondary students, as is the case with Canada. Definitely an interesting case study.

[@samuelwestknee7134]

where can I download the report? cant google it (only getting 2018 data)

[@lc285]

Watching this video a second time after watching Why the BOJ matters by Weston Nakamura puts in a greater understanding of what a Ponzi scheme the financial systems of the world actually are. These new systematic risk indicators seem to be another layer of a slow reveal of the eventual fallout.

[@guiart4728]

Is their a contagion factor? Does this trigger leak across borders?

[@michaelfelli7661]

Well, Jeremy Grantham has been saying for some time to look at investing in emerging markets once this "everything bubble" pops.

[@Rikhardoz]

Complicated problems spoken with clarity

[@ptahX]

I found this very interesting, excellent interview!

[@Jaywed]

As a Canadian, I am not shocked at all except the housing variable...

[@TapthatZhopa]

Watch Emil and Jeff Snider’s show if you don’t already. Amazingly Thoughtful and deep analysis every week.

[@benjamindover4337]

Great guest and great interview Maggie.

[@Scientist538]

great show, very insightful information

[@lc285]

Thank you to the guest.

[@ianniculescu1625]

Emil is the OG

[@Mishmicks1]

awesome interview, I enjoyed the Q&A with Emil and Maggie.

[@johnshaff]

This is a timely, and thoughtful interview. Thanks!

[@VideoconferencingUSA]

Nice job, please invite him on again, I see this interview is from Oct 2021

[@jcpedi7405]

so if a crisis Finance has a high probability to happen what should I do as a retail Trader? should I leave the market for now and wait for it to happen may in 1-8 years!!

[@Jen-po3wz]

Would love to hear more from Emil.

[@guiart4728]

Asked and answered…great interview!!!

[@sbkpilot1]

his last name is colonoscopy and he is going to do a "deep dive"? excuse me??

[@detectiveofmoneypolitics]

Still watching Frank G Melbourne Australia 🇦🇺

[@kopibin9532]

What a thoughtful and intelligent discussion on key macro early indicators of potential financial duress in surprisingly seemingly robust countries

[@philshyu5248]

Canada here. Certainly in the major cities of Toronto and Vancouver, housing has become ridiculously unaffordable. However, our country is geographically huge with small cities and townships scattered around which are still very affordable. So, I think how you calculate mortgage debt will affect your indicator in terms of how much weighting one places on the urban versus rural properties.

[@zomgoose]

Jobs pay significantly less in rural Canada.

[@zomgoose]

It is expensive everywhere in Canada. A trailer home in my hometown of 5,000 in Manitoba now lists for $160,000. 15 years ago, you could buy a decent started house in Winnipeg for $60,000. Wages have not matched housing inflation anywhere in Canada.

[@77magicbus]

Would be nice if somewhere you had defined what BIS stands for.

[@rddwelle]

Happened 42 seconds in to the show.

[@77magicbus]

@@rddwelle I guess I missed it . Thanks

[@bastion9514]

Just as a follow up here in NZ substantial % of population lived outside of NZ prior to Covid. This led to massive in flow of returning population and money = huge demand in real estate. This will now reverse as we back out of pandemic into endemic phase

[@johngrebnebeil4311]

In view of what was said it would be interesting to look at an African country such as South Africa