An economy built on debt needs more debt to keep it growing. And it doesn’t matter where the debt comes from.
Trouble is the debt (China’s) just isn’t flowing fast enough. The drop in export demand tells you foreigners aren’t buying. They’ve hit the ceiling when it comes to debt.
The U.S. and Europeans are too busy figuring out what to do with the debt they’ve already lumbered themselves with.
I’ve been trying to document the danger of debt. Brisbane City Council has taken on a lot more debt to build tunnels. But debt is neither as easy to precisely quantify nor as easy to understand as it might seem. It is always hemmed in by illusion and reasons to justify it.
When you are out of debt you know it with clear relief and your heart has a peace beyond price.
My sense is that with national (and council) debt we are straight-forwardly selling our country living on capital assets not on income. When all the assets are gone the creditors will leave us in no doubt whatsoever about what debt means. Just as they are sending Greece bankrupt and calling the price.