Half the world is “underwater”, in some sense. Personally, corporately, local municipality, or nationally
This is the nature of deflation as parties either A) Can no longer b) Never could c) Don’t see a benefit of servicing debt – Take your pick
At this stage of the game I’d say the “never coulds” are in the minority.
The “never coulds” represent the last stage of the debt pyramid and the first to get purged from the system as well as the minority. Liar loans were needed to keep the Ponzi going for a few more years
Forest – trees
When prices resume down again, as they will, it will exacerbate the problem – driving more entities to stop servicing debt, for one reason or another
It just the dynamics of the system.
fwiw – Out of the 780 billion in active student loans, only 40% are being serviced. The rest are in default or being deferred.
