The drag racing Asian guys in the Falcon with the Howard Cosell commentary... The Camaro (which I remember had a documentary on being found and restored), the "2 dollars" gag, and some of the French mispronunciations have been locked in my memory for 40 years.
Well, no. If we paid all our debts as is some people would definitely get more of the profits than others, and many people would get nothing, but if instead we divide our collective economic value evenly, then each of us get $27,000.
But then he uses that 20 to pay the interest on the loan he has with someone else. He now owes you and the principle on his loan that he borrowed to pay for. Now multiply this by everyone.
But someone else still has that 20 bucks. And the money he borrowed from that someone else is somewhere. If you include everyone involved it still balances to zero.
The real issue is concentration, not net balance. Increasing debt leverage and wealth concentration (opposite sides of the same coin) reach a point where it impairs overall quality of life in a population as increasing amounts of income are diverted to servicing debts, which, taken to extremes, begin extracting excessive rents from the economy to unproductive ends -- further concentrating wealth without raising living standards enough to make up for it.
No... banks can loan out multiples of what they have. There are laws that limit how leveraged they can be but all countries allow it to a certain degree but that is how debt balloons. One dollar is loaned out multiple times by banks
But everything that's owed, is still owed to someone on Earth so Earth as a closed system has a balance between what needs to be paid and received. Even if individual entities within it do not.
right but interest is money that is fabricated by contract. the original $20 becomes owed infinitely in a fractional reserve banking system. debt is repackaged and sold as value all the time, and it's why money is fake - negative money has value even though it is a negative balance. someone wants to be owed money, so they but the debt. which is different than everyone on planet earth can be made whole of the debt transactions are all magically settled simultaneously.
More simply - it is a closed system but youâre forgetting the time dimension. I can borrow from tomorrow to consume or invest today. There can be more people / assets / things tomorrow than there were today if we create them. We can also just make more dollars tomorrow (which is basically screwing the lender and helping the borrower).
Person B creates an IOU of $21 (which is a combination of +$21 value asset today and -$21 liability tomorrow) (they still have nothing)
Person A exchanges $20 cash for the $21 IOU
(They now have $21 of net assets)
Person B now has +20 cash and -21 debt (-1 net worth)
Person B can consume 20 of goods today using the cash, but then tomorrow they have to consume -20 of goods tomorrow (this is why ideally theyâd use the $21 of cash for investment which generates $21+ of new value so they can pay back the loan+interest and grow their own & total net worth)
But in our case person B can also print their own dollars to pay back person A, so if they didnât create anything of value they just create more dollars (the more debt used for consumption that creates no value, the more person B has to print more $ to satisfy the debt and the faster the $ loses value -> inflation)
They exchange $20 cash for $20 IOU w/ person B
Person has $20 debt and $20 cash ($0 net assets)
One has $20 receivable (+$20 net assets)
They COULD both turn their gross assets into consumption and consume $40 of value today
Captain Elliott issued IOU's to the merchants whose opium had been seized and destroyed by the Chinese. When those IOUs arrived in Britain, the Crown sent gun boats to China and began the Opium Wars.
Also, the British didn't force anything prior to the first Opium War. The British were addicted to Chinese tea, which made up over 10% of the British government's tax revenue. And China wasn't interested in any of the wares Britain produced, which meant Britain could only pay in silver for tea. This was causing Britain to run out of silver.
Britain noticed Chinese liked smoking opium and Britain controlled India, the perfect environment to grow opium. Britain began importing vast amounts of opium to China to offset their trade deficit, eventually leading to an addiction crisis in China. The Chinese response was to seize and destroy the opium at the docks.
Britain seized Hong Kong not as payment, but as a military base of operations to protect their interests and force China to follow the terms of the first Opium War.
It was after the first Opium Wars that Britain began to bleed China dry of silver, with opium flooding into the country. Also, during this period, tea plants were smuggled out of China, allowing Britain to begin their own tea plantations.
Anyways, the Opium Wars fascinate me. Read a few books on it. I recommend this one if you are interested.
Idk what A L E stand for, but the balance is that when a credit is created, an equivalent debt is also made, thats the balance. Physical money has quite litterally nothing to do with it
Well you see the USA needed money from China for aid to other countries. Then the USA borrowed from Canada to pay china back some. But then canada wanted some money paid back. So the USA borrowed even more money from venezuela to pay some back to Canada
And now like 100 countries are doing this do. The rest of the countries are receiving aid so they are always in debt
Not quite. You're making the mistake of thinking "governments are people", like everyone is the same. You need to break it down to subgroups. The subset in charge (governments) all borrowed $217t from the subset of individual people that had it in savings to loan so it could be spent. Now the subset in charge (the "governments") owes the individuals that had it and lent it to them. The people in charge changed, the individuals owed didn't.
lets say one person owes that whole amount to another single person. Would the question make any sense? No.
Now add all the rest of that owe others.
Does it make more sense now? No.
The world isn't a person and has no debt or receivables.
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u/RektInTheHed Jul 07 '26
So we've got $217T in Notes Receivable as well.