Worldwide Debt Jubilee

[IdahoCopper]

With the world's debt expanded by $57 trillion since 2007, and with no end of the increases in sight, perhaps it is time to steer the discussion to implementing a world-wide debt Jubilee.

Since this would affect the holdings of anyone owning bonds, mortgages, consumer debt, etc., it will be strongly resisted because of the major losses they would incur.

Looking at the debtor side of the equation, the outcome is easily predictable. Since everyone would be debt free and have unencumbered ownership of their properties, car, home, etc., a majority would immediately remortgage themselves and use the cash to buy what they think they need and want.

This would goose the world economy so profoundly with liquid cash, most of the "losers" on the debt-holder side would very quickly see their fortunes return.

Of course a Jubilee would hurt a portion of the populations, but the looming crash and subsequent Great Extreme Depression would hurt far, far more people.

Discussion?

[bankmining]

It would have to be unannounced of course, otherwise everyone that could would logically load up on all the debt they could. On the other hand if implemented without notice there would probably be a new grievance industry born for those who weren't "wise" enough to load up on debt beforehand.

[fansubs_ca]

It's a horrible idea, on the "individual to individual" level I imagine some debtors
would "disappear" after they give their creditors the finger.

I think everyone remember's "that guy" in junior high who always begged to borrow
what he could off anyone he could then made it a massive hassle when it was time
to pay back. All but the most persistant lenders would eventually give up trying to
collect. Well fast forward a few decades and that same guy would be all like "debt
jubilee motherf***ers" until he p***ed off the wrong person.

About the only group I see benefiting is anyone that had cash in hand and happened
to need an organ transplant at the time, they would find a very ample spike in the
supply of transplant organs for a short while.

Looking at the debtor side of the equation, the outcome is easily predictable. Since everyone would be debt free and have unencumbered ownership of their properties,
car, home, etc., a majority would immediately remortgage themselves and use the
cash to buy what they think they need and want.

Except a "debt jubilee" would destroy all trust and wipe out all financial institutions
which would destroy the functionality of electronic payment systems overnight.
There would be no "bank" afterwards and the few individuals with cash in hand
would probably not lend to anyone but the most trusted friend for the rest of
their lives. So anyone outside the "circle of trust" will have no access to credit,
and those inside it will have very limited access.

Without effective electronic payments any business of significant size (most
currently operating companies) won't be able to function so the vast majority
of the economy would grind to a halt.

Overall I think the wreckage would be worse than a hyperinflation.

Can't trust the currency, society can stumble through and find a new one.

Can't trust other people...that's a lot harder to recover from.

[wheeler_dealer]

If there were a "debt jubilee" would the dollar as we know it survive? An event of this type would be unprecedented in our interconnected world. Punish the financially responsible . Reward the frivolous.

[blackrabbit]

It did work for previous civilizations/empires.

[IdahoCopper]

It did work for previous civilizations/empires.

The others make pretty good points.

Other empires did it, but there was a known 70 year cycle. Towards the end of each cycle, money was hard to borrow and debts were structured to be paid off before the Jubilee. Immediately after a Jubilee, debt was easier to get and with longer payment terms.

Makes you wonder how the very first Jubilee was implemented, and what was its effect.

[blackrabbit]

Yeah, I think they will just debase the currency and non payable debt will be erased that way. That way all the insiders continue to get all the new free money and reap all the benefits till revaluation.

[silverflake]

For those of you with a biblical view of things this is a shmita year (the 7th year of the Jewish agricultural/economic cycle ). All fields are to be left fallow and the land is not to be tilled.And not only is a shmita year, it's a "seven sevens" shmita year or debt jubilee year where all debts are to be wiped clear and forgiven.

I won't get into the specifics but check out Rabbi Johnathan Cahn and his research on the shmita and how it correlates with markets and crashes. Eerie stuff.

Be prepared and keep stacking.