How To Spot The Next Debt Crisis

[@AlecMuller]

I'd love to see an analysis of how different business sectors (e.g. construction, defense, retail sales, pharma, etc) are performing relative to the amount they spend lobbying DC.

[@thomaskauser8978]

Bottle of Jack Daniels meet your house member , member of Congress meet J.D.!

[@samich2220]

I'd love to see people who lobby in jail. :)

[@rajasmasala]

Believe research showed the average lobbying ROI is 400% (no estimate done of roi in bodies)

[@popps33]

Now that will be interesting

[@1mol831]

Government could just eat all of the debt

[@abarbar06]

Amazing how there's always a crisis coming just around the corner. All times of the year, every year.

[@tylergust8881]

Fear sells.

[@randymillhouse791]

It's the only selling point that Republicans have.

[@ChiefMasterGuru]

That's capitalism for you

[@randymillhouse791]

@@ChiefMasterGuru Very true. Here is my view: "Men, Randy Millhouse has been doing everything right. Saving, investing, working hard, and being a good neighbor. Now, WE NEED TO CLAW BACK THAT MONEY SOMEHOW! I know, let's raise interest rates, let's crash the stock market, let's devalue his home."

[@TheBen4151]

Your videos are great, but do you ever do reviews of your older videos and discuss what you got right and where you might have gone wrong? Would be really cool to see!

[@danieldivenere4043]

yes pls!!!

[@iamcinmal5015]

Great comment!

[@randymillhouse791]

Of course he won't! There is no recession. Housing will not crash, it will get more expensive. The video that needs to be made is the one that educates people to move their careers into a better position monetarily. But too many people find that boring because they are lazy and won't go back to college or do anything extra to better their lives. Less clicks.

[@trappart9209]

​@@randymillhouse791why do you think there will be no recession in the near future?

[@randymillhouse791]

@@trappart9209 There may be, I don't care because I earn in the top 6% in my county, no debt, and I save over $100K each year while investments grow. Gas prices, inflation, etc. has no effect on me. I can retire now if I choose. People, in general, do not save and live way beyond their means. That is what the manager of my bank said of all of her customers, me being the ONLY exception at her branch. It is not hard to do well in the USA. It is sad that so many choose not to.

[@jmoneymillionaire6705]

Wow great analysis. Good to know what to look for in the business sector. Bankruptcies will be rife. I believe a lot of these will be related to housing as most of the mega housing conglomerates are highly levered.

[@vespuccini]

Also tech!

[@garretthayes5859]

The big publicly traded homebuilders like DHI and NVR aren't as leveraged as you might think. Most of them could withstand a 30% haircut on the value of their inventories without going bust. No doubt their stock prices would get hammered as earnings and book values were hit, but bankruptcy would be unlikely. Some of the smaller builders, that's a different story. Not investment advice, do your own research.

[@jmoneymillionaire6705]

@@garretthayes5859 agree with you. I dont think the big builders are going to go bankrupt this round. They will just build smaller homes that keep volume up - which will pull prices of the bigger existing homes down to earth. I believe all the REIT funds will be in trouble in this cycle. A lot of home Owners are renting instead of selling, thats putting huge downward pressure on rental prices. If they fall back to pre-pandemic levels, a lot of these reits will no longer be profitable and liquidate their inventory. Not to mention the imploding cmbs market

[@KeithRodri]

The production value is getting even better, great work. I recommend adding an end card to stall the last 5 seconds. That way your call to action cards don't block your last graph in the video.

[@gogogaga9970]

Do you know what software is making those dynamic plots?

[@KeithRodri]

@@gogogaga9970 I'd guess after effects or devinci resolve fusion

[@davesmithmusic]

Very interesting analysis. This makes me think since corporate america has a very strong grip on consumer needs, and a high shareholder demand to maintain profits, When the economy slows down and profits dwindle, the corporate response would be to cut expenses and raise prices. They can get away with raising prices because they have a monopoly on the food supply, energy supply and general consumables. While the fed is trying to bring down inflation, they will be fighting against the corporate demand for high level profits (the 11% indicated in the video). This makes me think that inflation is going to be persistent.

[@alexlowe2054]

I think this is a big part of the reason the fed is increasing interest rates so quickly, and has committed to continuing the interest rate hikes. While large companies have regional monopolies, smaller companies are going to get hit with interest rate hikes in a massive way. A wave of small business bankruptcies will ripple through the economy and destroy the large business sector, as they no longer have the ability to make large profit margins and continue to sell as many products as before, because of high unemployment. The small business sector makes up a large portion of the business sector, so even a 2% bankruptcy rate will crush the business sector and the banking sector. The fed has signaled that unemployment is the key indicator for when they're going to ease off the interest rate hikes. Second, is the fact that large companies are also overleveraged. High interest rates are going to destroy corporate profits. Large companies are going to have to start quickly sacrificing profits to pay down their debt, or they're going to see those profit margins evaporate through huge interest payments. Either way, those profit margins are coming down. The interest rate hikes are making sure of that. I think the only companies that aren't going to see massive profit rate reductions are companies like Apple, who already have a huge bank account that could fund their company for years. However, that touches on the third way that profit margins are coming down: fewer sales in items with large up front purchases. We're already seeing that in the custom PC market, and Apple has already slashed sales predictions. Consumers just aren't buying the new expensive products in large numbers, since most of them have been priced out of the market. We'll see something similar happen throughout other large ticket items like cars, homes, and other luxury purchases, as everyone with enough income to afford the current overpriced costs has already spent their money. Inflation of things like food and gas will also decrease the amount people have available to pay for larger items, which means fewer large purchases as budgets are stretched thin. While food companies are likely to be making record profits for a short time, that comes at the expense of the entire rest of the business sector. The only alternative method for companies like Apple to maintain profit margins is to cut jobs to reduce costs. Unfortunately, that still doesn't fix the entire business sector, since that will increase unemployment, which will kill the economy and cut business profit margins anyways. It all comes down to one simple truth: You can't magically create more money without side effects, so the record profits companies have had must come at the expense of something else, and the rest of the economy is struggling under the weight of record business profits. The downturn of business profit margins is inevitable. The only question is which companies will crash and burn, which companies will survive the upcoming corporate crunch, and how much the rest of the economy will suffer to feed the corporate machine. I think the fed is betting on a short but sharp recession that fixes things, instead of a long sustained struggle.

[@TheSmall555]

Its been coming every year since 2008. I see a video like this weekly. Someone's going to be right one day.

[@dnyalslg]

So, socializing losses by shifting debt to the government, while profits remain privatized, is bad.

[@Kjetil523]

It's horrible and it baffles me that nothing gets done. I guess politicians that wants to change things gets voted out or getting payed tons of money not to change anything . Lobbyism should really be illegal - It's legal corruption

[@Romogi]

I am from the future. Yes. But they keep doing it.

[@donchaput8278]

Excellent presentation. Businesses know this and it's why you are already seeing the biggest companies with mass layoffs

[@GoldenAgeMath]

Thanks for the high quality analysis! I like how you choose a few specific things to look at and then focus on them instead of trying to integrate so much info that your thesis becomes less focused.

[@newcomputer7]

You cited the paper by Reinhart and Rogoff, the result of which was misleading because of their own error in the calculation. Sad that this never gets corrected and this paper keeps getting cited

[@ReginaJQuintanaErekson]

2:02 I’m going with counting the debt as both a debt and an asset- I believe that is illegal for individuals/corps double entry bookkeeping but it’s super cool for governments worldwide.

[@davebarbetta]

The trouble with those studies is they primarily focus on non-reserve currency countries. It works very differently for the reserve currency country.

[@askeladd60]

it's actually worse for reserve currency countries as the imbalances can be greater and go for a longer period of time making the inevitable pop of the bubble that much stronger. In other words, countries like the US simply have more rope to hang themselves with.

[@davebarbetta]

@@askeladd60 I agree with you, but that “more rope” can last 50-100+ years of extra time before the pop. As long as we still have the strongest military, we’re likely not anywhere near the end.

[@askeladd60]

@@davebarbetta the USD world's reserve currency status has already given the US at least an extra 10 years of rope. Any other country with the gigantic current account deficits the US has been running over the last decade would have already faced a solvency crisis. The US military is a non-factor frankly, once the market comes with the terms the US is not able to service its debts and don't have the economic mean to finance its armed forces, it's pretty much game over for the US as the leading world power and I think that is likely to happen within the next 5-10 years.

[@aronmeystedt]

"sector" doesn't even sound like a real word anymore after watching this :D another great video. well done

[@pristinedetailing5171]

I follow many channels on finance. You, sir, are the best.

[@joe_carlson_]

I would be interested in seeing further analysis of the business sector. For example, which of the 11 sectors of the s&p 500 are most highly levered?

[@shotelco]

The visual presentation is outstanding. The concepts and theories are well articulated as expected now from EPB. My contrarian position, with respect only to government debt, and the governments welfare dependent children - The U.S. Business sector - is this: In reality _This_ Government (unlike all other governments in the world), *_Has no 'Actual' Debt._* By hard definition, The Global Exchange Currency Issuer can not have an actual debt, in that it is able to service whatever its contrived debt is by simply conjuring up more of its own currency to service the debt. To evidence this *FACT:* Just yesterday; the "CBO projected the US will *ADD $19 Trillion* to the national debt in the next decade." and that "Debt held by the *public* is projected to reach 118% of GDP by 2033" Thus, somewhere in the neighborhood of $50 Trillion+ in Government debt within 10 years. But that so-called debt is an artificial construct. Yes, as America conjures up more currency, the value is diluted...BUT... that dilution is absorbed by all of the other Countries that are forced to use the U$D as currency to trade between each other. The nonsense that other nations will abandon the U$D is utter lunacy. These nations won't abandon the U$D, and not because the U.S. is some finically stable bastion of goodness, just the opposite. The U.S. defends its Global Exchange Currency position with the might of its military. If any Nation attempts to use another currency, or create another currency not sanctioned by the U.S. - The U.S. has proven over and over again in just the past50 years that such an action will prove fatal to the offending nations civilian women and children. So this is a great video, but at the end of the day I submit no serious conclusions or financial forecast can be drawn from it.

[@carbonfibercrypto2919]

But the military is run by woke losers now and they can barely target a balloon

[@1fareast14]

The conclusion should be the opposite. A single military defeat slashes the effective size of the us economy. That's precarity, not security.

[@derrickmcdermed7621]

Except there is a group of countries already creating a new currency: china, Russia, India, ... And groups of countries are already not using the currency to purchase oil: Russia, China, Saudia Arabia, and more.

[@shotelco]

@@derrickmcdermed7621 Saudi Arabia is only "talking about" using another currency. But the others you mentioned, ...and Iran are trading _Some_ oil denominated in other currencies. Problem is Oil only accounts for approximately 3% of global GDP. The "Global South", perhaps led by BRICS, would need to band together to establish a viable - *and Defendable* - alternative to the U$D.

[@carbonfibercrypto2919]

@@shotelco there is very little GDP to brag about without affordable oil

[@dennis6325]

You nailed it dude! I can't believe how much corporate debt is rated just one step from junk. I have always said a 100% debt-to-income ratio is the "line in the sand". Why? Because if your income grows at prevailing inflation/interest rates then you can increase your debt by the prevailing inflation/interest rate in order to maintain the one-to-one ratio. This means, as long as your debt ratio is below 100%, you have the emergency ability to borrow to pay your interest payment on your debt. However, as soon as you exceed the 100% ratio, you no longer have this gap stopping ability and are most certainly going down for the count as soon as you hit a bump in the financial road. Great video. Keep it up.

[@juanchog]

Great video as always. Good job!

[@mugabe2606]

I would think that interest payments are more important than total debt. The past decade allowed for high debt with low interest. Now rates go up, and so must premiums. This could be bad

[@brettstowell4029]

Reinhart and Rogoff based their 2010 paper on an Excel model that contained a formula error which, when corrected, changed the 0.1% decline in real GDP they reported to 2.2% growth. To their credit, Reinhart and Rogoff later conceded this point. The fact they chose to include data from only 20 countries, and that they weighted the countries equally (putting New Zealand (population ~5 million) on equal footing with the United States (~330 million), Japan (~125 million), Germany (~83 million), etc.) brings the reliability of their results into question.

[@devincampbell3431]

Totally. I can't believe this guy doesn't know this. The whole study was discredited, and so now is this whole clip here.

[@loizosnicolaou8370]

The day am gonna go off-grid is getting closer.

[@yc8210]

Wondering what you need to prepare for an off grid life...

[@furiouhuzzah]

How is the Household sector decreasing their debt burden when homes are so over priced and people are taking out huge mortgages to buy small 1500 sqft homes?

[@triot2127]

Someone correct me but i think i read somewhere that most of the housing market growth has been from high paid workers in tech, older people buying second homes, and investment properties. I know the share of homes owned by institutional investors has gone up considerably. A lot less first-time home buyers out there who are usually the ones taking on mortgages.

[@jonathantaylor6926]

And credit card debt is exploding higher.

[@furiouhuzzah]

@@triot2127 I guess yeah if those folks didn't need to take out loans to buy the houses?.. that would make sense. Thanks for responding, I'm trying to understand all this stuff!

[@jbrc1322]

Very good explanation of concepts that I've struggled with. Now that US consumer debt figures have been released for Q1, it seems the tides have turned in that sector with record numbers showing increasing debt. With a Government debt default looming, things are not looking good at the moment.

[@gb-dt3vk]

Among the most interesting and informative economic videos available on the internet.

[@888ssss]

at the end of the day, its down to those with property or children to defend it, fix it or live in it.

[@ryanwilliams989]

Understanding personal finances and investing will most likely lead to greater financial independence. By being knowledgeable about money and investing, individuals can make informed decisions about how to save, spend, and invest their money. A trader made over $350k in this recession influenced market

[@StellaMaris-lv2uq]

Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are a-lot of wealth transfer in this downtime if you know where to look.

[@hunter-bourke21]

The best course of action if you lack market knowledge is to ask a consultant or investing coach for guidance or assistance. Speaking with a consultant helped me stay afloat in the market and grow my portfolio to about 65% since January, even though I know it sounds obvious or generic. I believe that is the most effective way to enter the business at the moment.

[@maggysterling33254]

@@hunter-bourke21 Do you mind sharing info on the adviser who assisted you?

[@hunter-bourke21]

Definitely! All of this happened in less than a year after *Gertrude Margaret Quinto* told me what to do. I started with less than $100,000, and now I'm about 17,000 short of having a quarter million dollars.

[@TheresaAnderson-kf5xw]

Thanks, I just googled her I'm really impressed with her credentials. I reached out to her since I need all the assistance I can get.

[@southern873]

I keep seeing these videos "Yup, It's Coming" for years now, but the question is "When"?

[@Simply_Patrick]

Thank you for the great video. The business sector is a major field, which areas are particularly affected or need attention?

[@jmitterii2]

Oligarchs gonna have to start paying. The 37% top tax bracket can't last. 1970 and prior to avoid deficits, they had to go where the money is at... and today top 20% income earners take on over 53% of total yearly income. While the bottom 40% only take incombined just about 12% of total yearly income. So the oligarchs are going to have to start paying that 70% to 90% brackets... it's where most of the money is located. You could tax 100% the lower brackets... but that still wouldn't produce enough net balance to quickly or pay off the deficit.

[@Vermino]

I wonder if two banks collapsing in a week and Yellen printing money for bail outs would be considered a debt crisis?

[@RottingFarmsTV]

Not exactly a debt crisis, but an increase in the money supply, which effects inflation

[@Vermino]

@@RottingFarmsTVThe Federal Reserve prints and loans out that money to the government. So if there is a increase in money supply, that means the government just took out another loan going deeper into debt.

[@madmoe3461]

It's actually not that hard to see where it'll be hit the hardest, look at every company with huge amounts of debt and look at banks The banks which gave the most consumer /commercial loans relative to their current valuation and earnings will suffer significantly more when the crisis does come, and in that event 2 things will happen, they'll either go under or be bailed out but in both situations they'll be hit really hard in their valuations. The other ones are companies with the really high debt to earnings and /or valuation, when the crisis comes and their earnings are negative they'll default which means the same situation with the banks, either bail out or bankruptcy. This is a debt cycle, if you even want to do it on the personal level u can, look at which of the friends or neighbors that have the highest debt and you'll see them selling their Houses in a few months.

[@losergamer04]

Thanks for making it so easy to understand that even I get it

[@pa9121]

This is the best channel on KZbin.

[@copper2walcott]

such an amazing channel. great quality, great info!!

[@PublicCommerce]

The real debt crisis is here. For decades the US government has been able to deficit spend without consequences because we had sufficient surplus labor for the economy to absorb debt without deficits creating inflation or requiring additional taxation. We could create the illusion that deficits didn't matter through a combination of deferred spending and debt deflation. Now that the labor force has stopped growing and retirees increasingly need to spend their savings and their retirement benefits, the ability of the government to deficit spend endlessly without creating inflation or crushing the economy with taxes is now disappearing. Enjoy!

[@desertdude8274]

Another words our economy is ruined by boomers and idiots.

[@jonathantaylor6926]

Either the FED hikes more aggressively and countless companies implode as their cost to service debt skyrockets... or the FED dove soars and these companies implode as inflation destroy's their customers ability to purchase their product or service. Take your pick.

[@robertmusil1107]

Destroy all useless companies with rate hikes. It's time for society to distribute resources more efficiently. There are too many people doing nothing at work.

[@verse8777]

Just discovered your channel. Very rare to find such a neutral yet interesting analysis on the topic. Exceptionally well done!

[@alf3926]

You made that analysis incredibly digestible and informative, props!

[@bonob0123]

so crony capitalism with government handouts to corporations is becoming a problem....yeah actually makes a lot of sense.

[@joestjack]

Just discovered your channel, what a fantastic video. Sitting here on the back porch of one of my investment properties here in Australia feeling very justified about the for sale sign that went up today, and on the other property I have round the corner, given that Australia’s household debt to GDP currently sits at 120%!

[@kunghsu1]

Japan governent debt is what? 250% of GDP, but it is still running OK. Japan has set a precedence for western countries to follow.

[@rajachan8588]

Excellent video. Thanks 🙏

[@stark5353]

All of these videos are extremely depressing to watch as a young adult just starting his career, but thanks for posting because it needs to be said.

[@danielhutchinson6604]

If you feel bad, consider the fact that two US Senators have reported clinical Depression, as they face the issue of dealing with a failing economy? The Policy that Paulson and Bernanke used to delay the 2008 crash, was to promote Credit Card distribution, that shifted the cash to Plastic, but ran Consumer Debt up even more. It has become extremely difficult to fix now. Get ready to find some Farm Job so you can eat......

[@zackeryhardy9504]

I don't think its something you as a young adult should worry a ton about. What I recommend is finding a job that is essential. Even if it isn't the job of your dreams, but one that can work in a recession or even a depression. And be prepared to take advantage of said recession. Remember that when people don't have money and businesses get desperate, they will often times sell things at lower profit margins or even at a loss if its a delaying tactic. For example mass housing foreclosure means you can get an affordable houses. Or even other assets that you can build up that you can get while its low. Its not going to hurt those just starting out as badly as those who have been in the game for a while. Its easier to start your career working at a fast food restaurant than it is going to a career in fast food from a high paying job. And on top of that, those who have been saving for retirement and are just about to retire may find that the money they saved over many years has essentially lost half of its value and now despite being 60-80 years of age, they have to work to survive.

[@danielhutchinson6604]

Try shit until you find something you enjoy doing, do it well and if you manage to get old and Humanity has not decomposed any worse than it has so far, you can look back and say that you actually lived.......Good Luck

[@robwithrbk]

A quick look at Fed Government tax revenue shows that if our glorious representatives could dial back spending to just 2019 levels, our budget would be balanced. That of course isn't going to happen. We could then grow our way out of this.

[@soliel5680]

The private sector could keep up if we trust busted all the monopolies to hell and back, implemented universal unions and promoted worker corporatives

[@desertdude8274]

Even unions wouldnt be needed if the Government and Big corporations werent becoming the same thing every day.

[@franwex]

I do see corporations deleveraging recently due to higher interest rates. Basically ultra low interest rates since the 2008 crisis made it cheap for government and corporations to get into debt. Higher rates is making them pay it down-at least in the corporate world. It does seems that finally Washington is talking about reducing deficits too. Basically higher interest rates lowers debt.

[@customjuices]

Your content is great. Thank you!

[@champstar9669]

Fun fact: There isn't enough fiat in the world to pay off all of the debts. It's literally *impossible*.

[@PJ-hi1gz]

Can you make videos on possible improvements to the economy? For example, this is very informative but how does government deleverage itself?

[@tommy35ss]

One flaw here, you are not including federal government debt owned by the social security trust fund. This is flawed accounting on the government's part and it still counts as debt. As outlays exceed inlays + coupon payments + debt maturation amounts, the social security trust fund will be forced to sell US treasuries on the open market. If that occurs, the debt they own becomes very real. The amount of federal government debt is currently over 120% relative to GDP if total debt is counted.

[@Leb.ertarian]

Excellent information and content as always EPB.

[@conservativemovement]

Excellent, thank you.

[@youngdadscomedy]

What should I do with excess 10k. Ppl are saying gold, others saying crypto.... others saying the stock is on sale right now. buy low. What are ppls thoughts

[@perrywidhalm114]

Excellent as always .....

[@watchmeasifly]

Great video, thank you.

[@DrKillFeeDZ]

The deductive conclusions that I can draw from this, is that it wont be the housing market that collapses this time around like 2008. Since the FED and Businesses took on the debt, it will be a BUSINESS crisis. Now for inferentials: Businesses will have to lower target margins to keep from going out of business. To do this, they will have to lower spending by layoffs, downsizing, or decreasing wages. This will create a bigger unemployment or consumer debt problem. Companies with too high of Debt/income ratio will go outright bankrupt if they cannot continue to access money from the government. The government will have to take on more debt to take care of the newly unemployed. They will also have to raise corporate taxes to offset this debt, but will have made no progress on actually decreasing their debt/income ratio, and the FED might also suffer from lost tax revenue, which might push their debt/income ratio higher. From this point, it seems like a hot potato of transferring debt back and forth until something foundational breaks. Globally, it seems like every country has much higher debt, greater populations, and greater supply issues. So there is technically nowhere to run. This means war/famine/revolution and ultimately depopulation.

[@Nic01101011]

6:10 Didn't a little Italian guy come up with a term for that in the 1930s?

[@MoffeeA453]

Hello, it’s August 2023. No crisis yet.

[@prygler]

Great video. Thanks. Great work.

[@Mrdean0001Dean]

Well done.

[@galvint2]

Money = debt. More government debt = more money = inflation. Corporate bankrupcy = bad debtt = less debt = deflationary.

[@jhutfre4855]

When will you be a guest at CNBC?

[@arunsadanandabhat8518]

Wow this video is beautiful it's very well made , can you provide more details on the recession and give proper updates ? Would help greatly

[@memos106]

So it's risky to invest in us markets? If not us. What other economy is a good choice to invest..

[@HavokR505]

so does this imply that business is using high debt to reduce their tax rate?

[@beau6113]

Excellent content as always!

[@guardian8754]

Hmm, wired way to combine percentage based graphs

[@yc8210]

Black background does not go well with dark blue lines. Lighter color lines would be easier on the eye.

[@markprocheska7302]

Its likely that the government will move from supporting the business sector to bailing out the consumer.

[@trennonclapp7930]

It would be helpful if you left the graph's labels on the screen while talking about the graphs.

[@hnfiiinc5993]

This reminds me of exactly why the 1st Republic in South Korea failed. The government spent too much money on institutions complacent on giving them loans without much profit. Take all that U.S. aid out and they were left to die by the masses. It took a dictator who first wanted to oust the ultra rich to realize through his economists that the country needed a reform. Decades later and the country went from mud roads/thatched roofs to concrete highways/skyscrapers. Government debt can only go so far in carrying that which is not profitable. China had to sell their non-performing loans to foreign countries in their reform and it worked wonders.

[@victormegir3041]

Amazing video. I have so many questions. What do you mean deleveraging? In what ways would each sector of the economy deleverage? The government bails out the business sector and helps the households via subsidies but how could these sectors "deleverage themselves" 😆? How can the government deleverage itself and can it (does it have enough time) ? Also, I am from Europe and I am wondering if the same rules apply for the EU and other economies? Maybe you have other videos explaining this stuff but if not, consider making some, they are really nice.

[@nathanielmohr9622]

The government can only decrease their leverage in the same ways you or I can. Reduce expenses AND/OR Increase revenue, AND, Use the excess to pay off debt, AND, Stop adding to the debt. Unfortunately, for the government to deleverage, they'd have to take this money right out of the economy. Less money spent on grants & research, favorable business loans, education, government employment, social security, medicare/medicaid, business bailouts, military spending, food benefits for the poor, all of it. And, more money taken in the form of taxes or alternative revenue sources. All of these have incredibly damaging implications to the economy as a whole, and will start a crisis on its own immediately. This is the long-term danger of the welfare state; the people at the bottom become dependent on the state, and the state doesn't really have to answer to anyone to manage its finances responsibly. This is the doomsday event for Democratic Republics. Historically, a powerful state would fill its coffers with slavery and military domination of other states. We don't like that anymore, though, and want our government to be the good guy, but there's only ever been consistent high-yield money to be made in two ways: 1. Extract money from those poorer than you 2. Innovate and hold onto the value of that innovation with your life Basically, in the end, we have two options: 1. Go back to world domination, cruelty, completely obliterate our enemies and liquidate/steal their assets, and slavery 2. Immediate long-term economic crisis at home But with 2, why would you do that, if you can keep putting off the economic crisis at the cost of making that crisis a little bit worse when it's eventually inevitable anyway, by taking just a little bit more leverage? And who wants to be the guy that's inevitably remembered as "the worst leader of all time" for responsibly peeling off the band-aid, and who wants to live through that crisis?

[@nathanielmohr9622]

It's all doomed and the economic meltdown is completely inevitable unless we find some incredibly innovative and highly lucrative alternative revenue stream. Just breaking even on expenses v revenue by lowering expenses will be enough to shatter the economy for Joe Schmoe as we know it.

[@victormegir3041]

@@nathanielmohr9622 Wow that's a lengthy answer... Thank you for taking the time to reply. The economy sure seems like an issue that is simple and complex at the same time. It's definitely true that no politician wants to be "The worst ruler in history" or "The worst minister of economics". It seems that a lot of times politicians don't want to implement unpopular financial policies and they want to stay in power. It's a shame that the poor and small people always suffer the bad choices AND the hard choices of governments.

[@captainnerd6452]

Sounds like a reason for all the layoffs going on, companies are getting ready for losses.

[@dougdimmadomeownerofthedim5376]

Thank you for explaining to in plain English that money is not real and we are so unbelievably screwed it's not even funny

[@Earwaxfire909]

I can't help but wonder how much of the business sector debt is bookkeeping manipulations to avoid taxes.

[@xSP3CiiALx]

Invest in SPAXX and T bill ladder

[@nuno1007]

Would someone please check this thought ? The debt to GDP levels of household?consumer debt are being calculated in tandem with inflated asset prices. What will happen when the inevitable repricing comes in and asset prices fall? I postulate that the household and even banking sectors are actually very leveraged but are partly obscured by asset price inflation. Is this possible or am I missing some calculation correction ?

[@DegenerateStreet]

Can you apply this to the UK since they currently have high bankruptcies?

[@InterlectualSpoon]

Meanwhile in Australia, housing debt is at 118% :)

[@JJV7243]

So how do we fix this? Increase taxes, decrease corporate profits, and pay off their debts?

[@desertdude8274]

Taxes barely even pay for the federal debt or any debt at all once so ever infact there isnt even enough fiat on this Earth to pay off the debts of the government. It doesnt matter what they do if they cant axe government spending. A long term government shutdown may be nessisary and austerity measures.

[@antoniolewis1016]

debt forgiveness for all! this is unsustainable.

[@jeffreymarshall4572]

US government debt has tripled since the GFC. We’ll never see another balanced budget again and debt will continue to grow until a major crisis occurs.

[@hansdoreen]

Pure gold!

[@theplasmatron3306]

it's like the knew for sure this was going to happen in the 2008 but decided it was all fine.

[@thejimbo1952]

So are you recommending we sell our shares and hang onto cash for now?

[@WraithlingRavenchild]

4:54 Ohh look you see exactly when they gave tax cuts out.

[@DriftJunkie]

Ok now. How do I prepare for the inevitable crisis?

[@alanjordan101]

Great video!

[@VTuber_Central]

BRING IT ON!!!

[@theincomechannel]

Great presentation. People need to learn how to spend less, earn more and then save those new earnings.

[@ianhamilton9457]

Did you make that J Powell animation? It's hilarious. Great video overall

[@n4870s]

So can this result in high unemployment due to public and corporate debt crisis?

[@g-rexsaurus794]

Is there any good defense of the high level of debt the US currently has? Some Keynesian theory?

[@anthonytravis1420]

How do you trade this?

[@trappart9209]

Is it better to be bullish or bearish on US Treasuries in the next recession taking into account that government is overdebted?

[@jbar_85]

When will the carpet be pulled from underneath all this debt?

[@thomaskauser8978]

How about if the federal home loan bank board needs a bailout and the federal reserve buys their bonds thus allowing the fed to silently bailout itself and getting a hold of the legacy treasury debt with the proceeds? I can't wait to see YELLEN's dagger go thru POWELL 's plans in the end! HOW CAN WE FIND OUT ABOUT THE SILENT MARK TO FANTASY THE FED IS ALLOWING TO OCCUR!

[@mattk1358]

Visualize corp debt sector next

[@lukec.5656]

Would you be able to expand on this video and describe what % of GDP means? I couldn’t grasp what exactly 359% of GDP meant in comparison to one sector being at 80% of GDP. For a single sector does that mean its the sector’s contribution to GDP?

[@EPBResearch]

Will do!