Tag Archives: private debt

I was teaching about deficits and debt this last week. If you know me and follow this blog, you'd know that I always emphasize the importance of the distinction between debt in domestic currency and debt in foreign currency. Functional finance authors (and MMT too) are correct in noting that a country cannot default on debt in its own currency (for a model of a currency crisis and default, in foreign currency go here; as afar as I know the only formalization of a PK alternative to the...

This article first appeared in the Indian journal Economic and Political Weekly on 13 November, 2021. Fermi Paradox In a recent article, Yıldızoğlu (2021) reminded us of the Fermi Paradox, which can be summarised as: Although the probability of the existence of other forms of life in the universe is sufficiently high, why have we not met any? Enrico Fermi, the Italian–American physicist and the creator of the world’s first nuclear reactor, was probably not the first person who asked: “but...

Ann Pettifor’s The Coming First World Debt Crisis (Pettifor 2006) was the first book to warn of the approaching 2007 Global Financial Crisis. More than decade after that crisis, its cause—excessive private debt, created primarily to finance asset bubbles rather than productive investment—is still with us, while we are entrapped in a pandemic crisis, and on the cusp of a climatic one. Figure 1: Private debt levels over the history of capitalism Looking forward to the next ten years, and given...

The government wants us to return to our office workplaces in the cities.   The FT tells us:“The government will [this] week launch a media campaign to encourage more employees back to their workplaces amid growing concern in Downing Street over the rising number of job losses at service businesses in city centres that are reeling...

The government wants us to return to our office workplaces in the cities.   The FT tells us: “The government will [this] week launch a media campaign to encourage more employees back to their workplaces amid growing concern in Downing Street over the rising number of job losses at service businesses in city centres that are reeling from a lack of customers. And from Sky News (Aug 20): “Just one in six workers have gone back to work in cities this summer after companies and staff ignored...

By T.Sabri Öncü & Ahmet Öncü This article first appeared in the Indian journal, Economic and Political Weekly on 18 April 2020. The authors’ contact details are at he foot of this article.Abstract Based on the German Currency Reform of 1948 and the “Modern Debt Jubilee” of Steve Keen, a globally coordinated orderly debt deleveraging mechanism is proposed to address the global debt overhang problem. Since the global debt overhang and lack of sufficient climate finance...

A close parallel to this situation was the state of Third World debt in the mid-1980s. Mexico’s announcement that it could not meet its foreign debt service was the shock that brought ugly financial reality into conflict with the assumption that somehow any government debt could be paid – even debts denominated in a foreign currency. The international financial system was rescued by the issue of Brady bonds – “good” new bonds for old “bad” ones. The capital value of these bonds was still...

Photo - Black swans in Regent’s Park, London - by Jeremy Smith T. Sabri Öncü ([email protected]) is an economist based in İstanbul, Turkey. This article was written on 8 March 2020 and first published in the Indian journal Economic and Political Weekly on 14 March 2020.Whether a black swan or a...

Michael Hudson filtering up. Zero HedgeCanceling Debt And The Debate Over 5,000 Year Old Economic Policy Tyler Durden

Building on the International Monetary Fund (IMF) Global Debt Database (GDD) comprising debts of the public and private non-financial sectors for  190 countries dating back to 1950, Mbaye et al (2018) identify a recurring pattern where households and firms are forced to deleverage in the face of a debt overhang, dampening...