But what is a debt jubilee and how does it work? How will it impact asset prices and the price of gold? How will it impact retirement plans? How will it affect you?
The Debt to GDP ratios of countries are soaring as a result of government responses to the economic impact of Covid-19. Even prior to Covid-19, the Debt to GDP ratios were already soaring:
- For China, greater than 300%
- For Japan, greater than 230%
- For USA, greater than 100%
In prior posts we have talked about the high debt levels globally:
The Debt to GDP ratios today will be even higher as governments given more debt and GDP is going to fall. In fact the Debt to GDP ratios are going to be so high that discussions are already taking place about how to pay off that debt. As the ratios go soaring, expect these discussions to move more into the mainstream and start showing up on CNBC, Bloomberg and Fox news reports.
We recently escalated this on the Twitterverse for conversation:
Here are some of the responses coming out. If the reasoning is right, it means gold is going to soar to new heights. A gold price of USD 10,000 per ounce as theorised by Jim Rickards and mentioned in earlier posts would not be unreasonable.
This is going to be a hot topic in the coming months. Stay tuned!