Deflationary debt crisis

lalman

Although I don't think its imminent by any stretch of the imagination, the world is far to indebted, we are rates at rock bottom pretty much across the world... and other countries lowering rates... deflation trends growing...


All of which increases the real value of debt... how would a deflationary debt crisis actually occur? Or could it if governments are willing to support the economy and themselves via QE?

purch

Nobody actually knows.

It's all theory, and in the current climate many economic theories are proving to be redundant.

lvader

The amount of debt is unimportant, just the cost of servicing the debt. In your example the value of debt might go up but the cost might actually go down. Germany has had negative yield bonds for a while.

Thrugelmir

I suspect we are already witnessing the start of the correction. As it's with hindsight that the fog clears.