All countries are in debt. What is this deal? who is producing anything worth filling this economic gap? (Fictional growth)
Posted on: November 10, 2025
Why is suddenly every country of the world in debt?…
US, China, UK, countries from Europe, India… and who is lending to them all?
America is over $36 Tn in debt… and China holds $750 Bn worth of this debt
But China is also under $18 Tn in debt...
Practically every major country of the world is currently indebted to every other, and we would think that the debts should square off... but collectively, the world is currently under $300 Tn of debt.
So how is the debt almost 3X the size of our global economy (actually financial transactions) … and what even is going on?
Because countries need money for growth… they choose to borrow from people by issuing bonds (basically, developed countries issues bonds)… and everyone who starts buying a country’s bond becomes a lender…
Till the early 1970s, most currencies of the world were tied to Gold… and because countries needed more money, the US delinked its money supply from Gold and just started printing more money at will.
Which means just print more money to pay to people…
And 70% of the US debt is to American citizens itself…
How?
Because when people put their savings in Banks, banks use that money to buy Govt Bonds, or essentially lend to the Govt… making it your money being lent to the govt… (As is the case in all countries)
So as more money gets printed, more goes into bank accounts, more bonds get bought, and the debt keeps rising.
Now, all major countries like China, US, European countries are funding ~20% of their annual spends by borrowing…
Till when can this keep going on?
As more and more money keeps getting cycled like this, inflation begins to rise… and general public becomes unhappy…
The rich keep investing in stocks and getting richer… the wealth disparity rises the world over…
Now that the US markets are giving crazy returns, the US is unable to raise more money and will have to increase the rates on their bonds to attract investors...
And which is why the US President may rightfully want the share markets to crash.
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