FBXL Social

I figure one of two things will happen: Either we have hundreds of sovereign debt crises like what we've started to see in the UK as all kinds of countries that have been telling their people it's a good thing to rack up national deficits so massive they can never be balanced and national debts so massive they pose an existential threat to the governments if interest rates rise, or we have even worse inflation down the line because governments give up on trying to control inflation so they can continue QE and keep printing money to keep the game going damn the consequences.

Either way the common man loses. The former has destroyed empires, but the latter has created dictatorships that caused the greatest evil ever known by man.

Bankruptcy is a nice thing created for individuals in debt. Such a thing does not exist for nations, really. There are debt refinances, or debt restructuring if countries can come to an agreement with debtholders, but sovereign debt tends to be something that doesn't go away as easily as bankruptcy.

Canada had a sovereign debt crisis in the 90s where their bonds eventually just went no-bid. They simply couldn't sell the bonds, there were no buyers. In order to solve its problems, it had to cut spending and increase taxes to reduce costs and raise revenues. That's the right thing to do around the world, and it's going to become mandatory, but it takes courage and will and right now all the politicians want to pretend they can be all things to all people.