Debtors and Creditors

Debt is a worldwide problem. Who are our creditors? What must we repay?

It’s probably either very complicated, very corrupt, or both. On a personal level, the relationships between debtors and creditors is simple. There are usually documents which specify the details.

Let’s consider a hypothetical debt between the UK and the US. There should be a document... say a treasury bond issued by the US Treasury. When the bond expires, the US would pay the UK in dollars. This should be no problem... the US owns the printing press. We print the dollars and pay the debt. The UK now holds dollars. They use those dollars to purchase assets in Florida. The value of the dollar drops causing other Florida prices to rise.

Confused yet? Multiply this situation millions of times with many different countries and many different currencies. Add on several trillion side bets (derivatives) that exist to protect everyone from losses. I hope that clears up any confusion.

The point is...we exist in a convoluted system which could collapse un itself very quickly. Actually instantly.

This would leave everyone blinking in dismay... pondering what to do.

At the local level trading could occur man to man. I’ll trade one silver dime for a dozen eggs.

If the world will no longer accept fiat currency, will trades occur in gold backed currency? What will Argentina exchange for beef?

There are no clear answers yet. A collapse may show us the way.

Consider what you have to trade.

Here is today’s beauty.