The global GDP : US $ 79 trillion
Global Debt : US $ 281 trillion
Therefore , like the typical tunnel-visioned CA that I am, I reckon the NAV (net asset value) today of the whole world is (-) US$ 201 trillion.
The question is :
- Does anyone care? No!
- Do any of the international multilateral financial institutions (WB , IMF , OECD, BRICs Bank etc.) owned by so-called Developed Nations ( USA, UK, EU, Japan, China) care ? No!
- Does the G8 of the world care ? No!
Why not ?
Because, Global Debt is basically an ASSET sitting on the “right-side” of the Balance Sheet of the US Federal Reserve Bank .. while, at the same time, it is LIABILITY sitting on the “left-side” of the Balance Sheets of the Central Banks of borrowing-countries in the rest of the world .
How so ?
Because all Global Debt is denominated in one world-reserve currency only : the US $ . And therefore all debt-settlement can take place in US $ only …
Now who controls the flow of US currency ? The US Fed of course … The Fed can turn on or turn off the tap from which flow all global debt streams — in or out — virtually at will .
The USA cannot default on its own National Debt of c. US $ 28 trillion since it can simply print more currency and payoff itself .
In the rest of the world the countries saddled with the biggest $ debt are Japan, UK , EU , Canada … (you could say the G8 countries) who are all considered “cozy allies” of the USA . If ever they were to default on their debt , the US could (through the multilaterals) always lend them even more billions of $ to stave off default. When the Balance Sheets of the Lender and the Borrower merely mirror each other’s financial indebtedness … each other’s asset and liability … it doesn’t really matter how big the burgeoning debt-based transactions between them is …
As for the rest of the world … whose $ debt on the individual country balance-sheets is a mere fraction of the aggregate global debt … they don’t care since they know in the larger scheme of financial affairs of the world , they don’t matter either .
( https://spendmenot.com/blog/national-debt-by-country/ )
And so … the whole world today is spinning around happily on the merry-go-round of Debt without any care …
Debt much like God Almighty, as someone famously said, is convenient fiction too …. Even if Debt didn’t exist , it would still be necessary to invent it.
😇🤗
Sudarshan Madabushi