Will there be a debt reset of everything

Time2Go_25

My only hope is that individuals learn from this and start to live more within their own means and to save for rainy days as they are sure to come eventually. 

Brock_and_Roll

As a banker, no! The world will continue much as before - some people will lend to much, some borrow too much. Some will do neither. Been that was for several thousand years!

Thrugelmir

spencerrothchild said:

FrugalCat said:

We're currently in an interesting macroeconomic situation: There's strong deflationary forces at work (high debt-to income, economic weakness), but they seem to be balanced by strong monetary intervention and low interest rates. When the balance breaks, historically the way out has been a currency re-valuation. While that would reduce debt levels, it's important to remember that high debt is likely to catch the households out around this usually volatile time - be it through falling relative income or increasing interest rates.

The Cantillon Effect: The influx in money benefits those (the treasuries and governments, then the big lenders) who get their hands on it first and get to spend it before the prices adjust. Those that receive it further down the chain (consumers) will already experience higher prices to go with their extra money.
Look at it this way: Bank prints trillions, most of it goes to banks and private equity first. By the time households receive their usually yearly wage adjustment for inflation, their disposable income has already been squeezed by increased prices.
While debt servicing may be fixed, initially there's less money to service debts. Those without a buffer of disposable income (high debt/income ratio) will default on their debt before they get the chance to see it inflate away.

And that's without taking into account the currently large increase in unemployment or economic slowdown.

When you look at the derivative time bomb, some banks have trillions in derivatives that just exploded when the oil price went negative $40

Any substantantive links for this claim? Other than conspiracy theory or social media websites. 

sourcrates

It was announced yesterday that Lloyds were 95% down on there profits for the first quarter of this year.

They are currently putting aside money to cover the expected upturn in people defaulting on their loans and credit cards, i would expect other banks will do the same.

The debts won`t be written off, they are just attempting to insure themselves against the expected losses to come.

The usual pattern of sale to debt purchasing companies will continue, it will be those companies that take the gamble of ever getting any money back.

Millions have been put out of work worldwide, as well as a significant amount in this country, things will not return to normal quickly, we will feel the repercussions of this for quite a while yet.

mcpitman

spencerrothchild said:

FrugalCat said:

We're currently in an interesting macroeconomic situation: There's strong deflationary forces at work (high debt-to income, economic weakness), but they seem to be balanced by strong monetary intervention and low interest rates. When the balance breaks, historically the way out has been a currency re-valuation. While that would reduce debt levels, it's important to remember that high debt is likely to catch the households out around this usually volatile time - be it through falling relative income or increasing interest rates.

The Cantillon Effect: The influx in money benefits those (the treasuries and governments, then the big lenders) who get their hands on it first and get to spend it before the prices adjust. Those that receive it further down the chain (consumers) will already experience higher prices to go with their extra money.
Look at it this way: Bank prints trillions, most of it goes to banks and private equity first. By the time households receive their usually yearly wage adjustment for inflation, their disposable income has already been squeezed by increased prices.
While debt servicing may be fixed, initially there's less money to service debts. Those without a buffer of disposable income (high debt/income ratio) will default on their debt before they get the chance to see it inflate away.

And that's without taking into account the currently large increase in unemployment or economic slowdown.

99.9% of the debt in the world is being defaulted on, its many trillions 

the 0.1% of the debt in the world that is being paid back is insignificant compared to sovereign and big bank derivatives debts

the only answer is to have a big reset of the system 

And 42.73% of statistics are made up on the spot.

Can you provide some reference links to the above twaddle please?

Or do you think you are in the film Fight Club?

[Deleted User]

pdel61 said:

My only hope is that individuals learn from this and start to live more within their own means and to save for rainy days as they are sure to come eventually. 

I share your sentiment but it won't happen enough, people have short memories and want everything now, and some have the wrong attitudes to money altogether, in the first place ……..(i wish there was a shrugging, eyerolling, emoji) 

spencerrothchild

pdel61 said:

My only hope is that individuals learn from this and start to live more within their own means and to save for rainy days as they are sure to come eventually. 

Do you think the government should live by this advice?

What about the banks?

you can’t one rule for one and not the others

if we follow the big banks and the government then keep going further into debt by having your outgoings far more than your incoming 

spencerrothchild

sourcrates said:

It was announced yesterday that Lloyds were 95% down on there profits for the first quarter of this year.

They are currently putting aside money to cover the expected upturn in people defaulting on their loans and credit cards, i would expect other banks will do the same.

The debts won`t be written off, they are just attempting to insure themselves against the expected losses to come.

The usual pattern of sale to debt purchasing companies will continue, it will be those companies that take the gamble of ever getting any money back.

Millions have been put out of work worldwide, as well as a significant amount in this country, things will not return to normal quickly, we will feel the repercussions of this for quite a while yet.

Brilliant post Soucrates but people don’t like like the truth round here unless it’s sugar coated.

let them go on thinking that the banks are not down 95% profits just the first quarter alone,  And the next few quarters are going to be much much worse with all the derivatives counterparties defaulting

there is not going to be an avalanche of defaults both personal and businesses, they will get the money from somewhere keep up with all their outgoing sales even though they have hardly any incoming 

just ignore the millions getting laid off worldwide, the explosive numbers of unemployed soon to Ben looking for even less jobs and most businesses will be reducing rather than hiring


don’t worry they hints W I’ll  be back to normal soon, there will be a v shaped recovery and pigs can fly

eskbanker

spencerrothchild said:

pdel61 said:

My only hope is that individuals learn from this and start to live more within their own means and to save for rainy days as they are sure to come eventually. 

Do you think the government should live by this advice?

What about the banks?

you can’t one rule for one and not the others

You're not seriously suggesting that national debt, corporate debt and personal debt should be lumped together and treated the same, just because they all have the word 'debt' in common?! 

spencerrothchild

eskbanker said:

spencerrothchild said:

pdel61 said:

My only hope is that individuals learn from this and start to live more within their own means and to save for rainy days as they are sure to come eventually. 

Do you think the government should live by this advice?

What about the banks?

you can’t one rule for one and not the others

You're not seriously suggesting that national debt, corporate debt and personal debt should be lumped together and treated the same, just because they all have the word 'debt' in common?! 

So is this how you challenge the statement that 99.9% of the debt in the world is being defaulted on?