Dealing With Debt Problem Depression

We resolved not to be depressing today. And in truth despite the growing global debt problem – we’re not, for two reasons. First, we loaded up our readers at Australian Wealth Gameplan with three oil shale stocks earlier this year. All three are killing the market. They go higher when oil prices go higher. And they go higher when energy becomes scarcer, which is pretty much every day.

The second reason we’re not depressing, or depressed, is that there is truly nothing new under the sun when it comes to human nature. Today’s events may seem like the most important ever in human history, and our lives the most important human lives ever. But surely everyone alive has always thought that about themselves and the world they live. This is the point we tried to make to our friend last night after dinner on Fitzroy Street.

“The reason doom and gloom is mainstream now,” we said, “is that everyone else is finally waking up to what we started writing in 2007. It’s like they’re finally realising there is no policy fix for this. It’s a debt problem. The debt has to be extinguished. And there are only a few ways to do that, through default, or inflation, or slow repayment over many years.”

“But that’s depressing,” our friend replied.

“Not really. That’s just reality. And the good news is we’re closer to the end of the debt problem cycle than the beginning. The bad news is that the worst of the cycle is probably still ahead.”

“How much worse?”

“Well, asset prices should be falling. But the money printers are trying to prop them up. They’re trying to prop their whole system up. But the whole system is broken.”

“See when you say things like that it makes it sound like there’s no way out. Like we’re all doomed from this debt problem.”

“There isn’t. And we are! But that’s not a bad thing! That’s just life. This system has reached its use-by date. But life goes on. We’ll survive. That’s all we’re trying to help people figure out…how to get from this side of the debt problem crisis to the other without taking a big backwards step in quality of life.”

“But what about everyone else? There are lots of people who don’t see this debt problem coming. People are going to lose jobs. Lose their retirement. That’s a lot of misery. You seem happy about that.

“No, of course not. I’m not happy about that at all. But there’s only so much you can do in life. You can take care of yourself and the people around you that you love. Life has always been like that. At least as far as I know. And really it’s a mental health issue.”


“We have this stupid belief today that if we just assimilate all the information available all the time that we’ll make better decisions…be better investors…know more about the world. But I’ve come to believe the opposite is true. The more useless information, garbage, and news flow we try to assimilate, the more cluttered our thinking becomes. The world overwhelms our conscious minds and we become paralysed by information overload. Our OODA loops can’t keep up. This is why people saw the signals in 2007 and ignored them and it’s why most people ignore them now. They’re shell shocked by the semi-permanent state of financial crisis. Credit has sped everything up, created this debt problem – and has made everyone slightly manic.”

“Um…so what?”

“So if the world is driving you crazy and you feel hopeless and depressed or stressed…just turn off your stupid computer and step away from the television. Don’t check your e-mail 20 times a day. And for goodness sake don’t treat your smart phone like it’s your lifeline with the world. Shut it off and live a little. I guarantee you’ll be happier.”

“Does that mean I should stop reading the Markets and Money too?”

“Oh no. Definitely not. Keep on reading. It will cheer you up. I’m sure of it.”

Dan Denning,
for Markets and Money

Dan Denning
Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.

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Rick W
You offer: “The debt has to be extinguished. And there are only a few ways to do that, through default, or inflation, or slow repayment over many years.” End Quote There is another approach that should get serious consideration. The idea of a debt jubilee through some form of social dividend paid to everyone without means testing. It has advantages over other methods. -Wiping the slate clean for debtors alone rewards bad behavior. -Creating money to launder through the banking system primarily benefits the bankers. It is slow to trickle down because it is like pushing on a string. If… Read more »
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