The Looming Debt Crisis & Cryptocurrencies

By Patrick Tan on ALTCOIN MAGAZINE

Appended to the Bitcoin genesis block, which we celebrated the 10th anniversary of just two days ago was a cryptic message from Bitcoin’s creator Satoshi Nakamoto,

“03/Jan/2009 Chancellor on brink of second bailout for banks.”

Today, a debt tsunami, the likes of which the world has never experienced before lies on the horizon, but it’s not from banks alone, it encompasses the entire gamut of borrowers. From student loan debt to government bonds, the world has binged on borrowing. Investors, buoyed by access to easy credit have also sought to purchase increasingly more exotic debt instruments in search of yield. The product of this debt chase has risen to a US$250 trillion debt tsunami — a level which the world has never experienced before and three times what it was two decades ago. And this time, the biggest debtors are also the world’s biggest economies. According to Citigroup analysis of data from the Institute of International Finance, the biggest borrowers include the United States, China, the Eurozone and Japan, which collectively carry more than two-thirds of the world’s household debt, three-quarters of corporate debt and nearly 80% of government debt.