Debt and greed is what has caused this mess in the first place. Think about it.
What is debt really about? Building wealth today at a higher risk rather than wait till tomorrow. You may miss the opportunity if you wait. That is true especially when applied to a company.
IMHO debt takes on two forms.
It props up an artificial form of growth in the way of securing assets to use as security to borrow more.
Within each form of leveraging the risk becomes higher for default, obviously meeting interest rate payments which puts further stress on the borrower.
I could be talking about a property - company - country.
It still comes down to the same situation. If you are taking on greater risks in the hope of building wealth via securing debt, unless you can meet the repayments everything will unravel. Unemployment being one of the keys when defaults increase.
I am enclined to agree with aceraceracer regarding the law of diminishing returns. All countries cannot continue building infinite growth. That means there has to be winners and losers somewhere along the line. China is moving ahead to take total dominance especially as a lender, where as western civilisation as the borrower over the last 20 years has been taking up more debt to artificially prop up its economy. It has come to the point of no return. Our living standards will drop as China's continues to increase.
One consolation is we have the mining industry to depend on to at least give us a softer landing compared to the US and EU Countries.
