Wednesday, March 24, 2021

Global Debt And Black Swans

Global debt climbed new highs in 2020 as developed countries borrowed at a record pace to, basically, send out free money to their citizens - Chart 1.  The ratio was up an eye-popping 50% from 294% to 343% - a new all time record, of course.  Total debt stood at $281 trillion at the end of 2020. Given the continued fiscal and monetary largesse from the Biden administration ($1.9 trillion already done and another $3 trillion announced) and the  economic trouble in the EU, debt/GDP will almost certainly go even higher this year.

Chart 1

Combine massive debt, zero/negative interest rates, a financial bubble, loony toon spending on crazy stuff (eg NFTs and cryptos) and looming inflation and... what do we get?  

Honestly, no one really knows - this situation is unprecedented in history.  We can't really find anything to "rhyme" with what is happening today.

So, when in doubt, get the hell (!) out.  Given the unknown-unknowns, this is my best prediction:

  • There's a Black Swan coming.  No - not even that, because we know that black swans actually exist. I'm not going to put it down in pixels, just let your imagination run rampant to come up with an appropriate simile. Matrix, anyone? Blue pill or red pill? (Big Smile).

C'mon, this could be fun: imagine the wildest, most out-of-the-box outcome over the next few years and let it rip in the Comments section. 


  1. Something along the lines of climate change maybe? A series of catastrophic weather events... Or another pandemic? Civil unrest within the US, homegrown terrorism on a much wider scale?

  2. Thanks for the question. The next Black Swan will be White. Something that is there, everyone can see it, pretty normal, expected, nearly planned: the transfer of power from US to China. This will happen, no doubt, I just think it will happen much faster and everyone will be like "what the duck??" or "what the swan??".

  3. How about the defeat of the democratic states, which will concede land and power to private corporations, I.e. there will be an Apple Island, an Alibaba Country, a Google Nation? Things will fall apart when each of these states realize they also need an army, then it will transition to standard dictatorship. Rinse and repeat.

  4. The aliens reveal themselves, and we discover they have engineering the fossil fuel era in order to cause an overshoot and collapse scenario that will drive the nuclear nations into WWIII. Once we've obliterated each other, it is revealed it was all done to settle a bet about human nature made between two wealthy, Centarian brothers. Either way, the new Hyperspace bypass can now be built.


  5. thanks for the information you share. Financial market is like roller coaster. If we don't care our financial situation, our business credit score is going very low.