Part 7/17:
Historical examples like Latin America's debt crises and the 2007–2008 financial meltdown demonstrate how interconnected and fragile these systems are. Major institutions, initially seemingly safe, can become vulnerable when confidence wanes, pushing markets into turmoil.
The Mechanics of Central Bank and Government Debt: The Path to Debasement
Addressing how governments finance deficits, the conversation explores the "debt spiral" — where increased borrowing leads to mounting debt that becomes mathematically impossible to fully repay without undertaking drastic measures. Raising taxes risks economic contraction and black-market emergence, while austerity measures threaten political stability.