Why Is the World In So Much Debt

My house being valued at $100000 more than it was when I purchased it does not help me. It helps the government that collects taxes on the value of the land. They are collecting more on a percentage and then the "value" of the house is greater.

Superb structural analysis, @EconomicsExplained. Most people don't realize that macro debt cycles act more like hidden liquidity conduits than straightforward economic balancing acts. When a sovereign state steps into the matrix to manage these fractional reserves, the real game moves completely off-balance-sheet. Fantastic dive into the systemic plumbing here!

Your video's are fantastic🎉! I become smarter when I watch them 😊

Very very good video. Makes you think.

I think one place to keep watch on in the context of the hard and soft asset cycle is a consolidation of Chinese companies - USA, Europe, Japan all consolidated from mass of small companies in to large companies - the outcome is very serious look at a US city like Detroit and the outcome of consolidation of hard assets by companies. It is pretty major reduction in hard assets when you consolidate. M&As also the soft asset consolidation as well. Higher control over pricing and the outcome of that. The USA and Europe also have a future of consolidation brought on by AI yet it is mostly in the soft assets unlike China where companies and factories consolidating with AI and automation is consolidating both.

In some places especially in the global south ,things have really improved and its not just statistics, I grew up in one of these places .

Growing up in the early 2000s, during the school holidays, I would often see bands of barefoot children ,with reddish hair (i.e malnourished) ,clad in their torn uniforms going round the village looking for odd jobs. Such scenes would often be repeated in almost every village in the country. These days, despite the fact that the population has increased by about 50% such scenes are not as common as they used to be ,the gdp per capita is still below 3000 usd but living standards have improved.

Learned more from this video then most of my semesters in college... thank you EE

Great perspective about incentives

Incredibly insightful video, more please!

The elderly know they'll die before the consequences hit so they're living it up at the expense of the future.

The most interesting segment you've done thus far. Will have to think on this.

Fantastic video. I was able to connect a lot more concepts, thank you.

That's a point about the wealth tax that seems to get missed. The incentives to shift capital to productive assets frightens a lot of people whose only hope of making money off an asset is to sell it to someone else hoping to unload it before the music stops. A wealth tax would very abruptly stop the music.

I feel like this video is an excellent explanation of Thomas Piketty's thesis in Capital.

The thing about wealth is that most of it is not real, it's speculative. That this as an example:
Company has revenue of $19 billion per year while operate at loss of $5 billion per year, it has physical assets totalling some few billions while the rest few tens of billions is in estimated brand value and intellectual properties.
It goes public offering a small portion of its shares for sale, these shares got some $90 billion in investors purchases. The same share price is applied to the remaining shares still held by the company and early investors, making the company valued at $2 trillion.
And that's how the world's richest man become a trillionaire after "gaining" about half trillion dollar overnight, 95% of his wealth is in way over valued share prices.

An interesting part about networth and natural resources is that natural resource estimates are often "extractable". Which actually means "financially viable to extract". So if a price of a natural resource increases, the price of a deposit increases twice. Once because of increase in unit price, and again because more of it can now be extracted profitably. And that way of estimating them is grounded, because you don't really care if there's a million tons of gold if you will be operating at a loss extracting all but a thousand tons.

8:38 You go from referencing the "1.7 quadrillion dollars of global assets" to "1.11 trillion dollars of liabilities" then immediately call it "1.11 quadrillion dollars in total liabilities". I know we're dealing with numbers so big that they're barely comprehensible, but it makes it harder to comprehend when the scale is off by a factor of 1,000.

GDP also fails to account for the tragedy of the Commons.

If a factory makes cheaper goods by polluting a river which increases health care costs for everyone in the area, those healthcare service costs are added into the "value created" but they they should be subtracted as part of the cost of creating that good.

When every property doubles, every buyer has also to pay double.

No worth was created, its a zero sum game.

"Enough for everyone's need, but not enough for everyone's greed."

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