The Debt Singularity

Eversince the China stock market devalued by 65% I have been fascinated by the markets– are we on the brink of some global market collapse or just another [10x as big] subprime bubble?  The indispensible Zerohedge distills the essence of market reality.

One way of putting an annual deficit of, say, $700 billion into perspective is to compare it to the value of all publicly traded stocks in the U.S., which are worth roughly $20 trillion. The current U.S. government debt of $18 trillion is rapidly approaching the stock value of all public corporations — and that’s true even with stocks at bubble-like highs. If the annual deficit continues at the $700 billion rate — in fact it is likely to accelerate — the government will borrow the equivalent of the entire equity capital base of the country, which has taken more than 200 years to accumulate, in only 29 years.

I am thinking of the technological singularity, that is supposed to deliver us functional Strong AI…at the point above the knee of the exponential curve where the asymptote approaches vertical.  It seems to me we are witnessing a Debt Singularity — the natural evolved result of the monetization of debt.

So what happens neXt is anybody’s guess– the only thing im sure of is Collapse.

And we will deal with that in my neXt blogpost. 🙂


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