Forget What They Say – Everybody Loves Debt!

Eric Garland Finance Trends 1 Comment

As part of my research for the inaugural issue of the The Garland Report Monthly, I am researching the debt structures behind cities, regions and countries that are going broke.

A shocking picture is emerging. Given the potential mayhem behind the events of 2008, you would think that a complete sea change might have been in order. After all – the bankers told us that they brought the world to the brink of global collapse, food riots, and the end of democratic rule.

Do you not remember that part? I was in Washington DC when it all came down – that’s how serious they told all the policy makers it was. That’s why the bailout was so big and with so few strings attached – if it didn’t happen immediately, we were all doomed.

Serious stuff! So you would think that the world would have changed materially, especially when it came to debt structures.

According to the Bank of International Settlements, there are more over the counter (OTC) derivatives (credit default swaps, interest swaps, all of that junk) today than there were prior to the crash – $600 trillion outstanding.

Wait, wasn’t that what blew up in 2008? Didn’t we…get rid of them? Or cut down on them?

And since debt is bad and cities are going broke, are we going “austere” and living within our means? Or are we issuing more national and municipal bonds at every turn? Well, have a look below.

The more you look at debt from a global perspective, the more curious it looks. Debt as an individual is all about being broke. Debt as an institution is about a power structure, and being the institution that owes money does not mean being as powerless as an individual in the same position. There’s a lot of power on the “bottom.”

Forget what they tell you – everybody LOVES debt.

This and more when the Garland Report Monthly drops in a couple weeks.