>>60653785It's called leverage. There is so much "borrowed money" that props up the value of all assets, including all sorts of service sector jobs, income statements, balance sheets, tax revenues etc. Alllll down the line you have every last little nook and cranny of the economy slammed with borrowed money that is distorting everything.
Well, what happens is all of these bad loans start to turn sour and there is a mad scramble for liquidity. Assets start being sold to get cash to pay back loans and then suddenly everyone starts to see the "true" value of their assets. As you endlessly toil your entire life, you now realize that all of those stocks you were buying, your insurance benefits, social security, pension, your house, etc. It's all a stinking pile of shit. The bank you put your money in is bankrupt and can no longer afford to lend. And suddenly you can't find anyone able to pay cash to buy your overpriced house. And the stocks that were backed by $0.05 of assets for every dollar you invested suddenly lose 90% of their value.
The issue is capital vs credit. Without endless loans you find out that everyone is broke. And the counterparty risk suddenly proves that what you thought was "wealth" was just a bogus IOU that someone else owed you money. But they couldn't pay you unless someone else paid them. A massive daisy chain of value that doesn't exist needs to flow through 10 different pockets before it reaches you. And you and I all of the rest of the tax cattle will be the ones to bear the brunt of the economic losses.
This is why you should buy real capital assets that have no counterparty risk.