John Adams: "There are two ways to enslave a country. One is by the sword. The other is by debt."
Worth thinking about when you see sovereign debt-to-GDP ratios hitting records across developed economies. Debt doesn't feel like a crisis until it suddenly does. The interest payments alone are now competing with defense budgets in some countries.
This isn't some doomsday prediction. It's just math. When servicing debt becomes the priority, everything else — infrastructure, innovation, social programs — gets squeezed. And the political response is always the same: print more, borrow more, kick the can.
The same logic applies to your portfolio. Leverage feels like genius in a bull market. But when rates rise or liquidity dries up, that "genius" turns into forced selling at the worst possible time.
Debt is a tool. Used wisely, it builds. Used recklessly, it destroys. Most people — and most governments — don't know the difference until it's too late.
Worth thinking about when you see sovereign debt-to-GDP ratios hitting records across developed economies. Debt doesn't feel like a crisis until it suddenly does. The interest payments alone are now competing with defense budgets in some countries.
This isn't some doomsday prediction. It's just math. When servicing debt becomes the priority, everything else — infrastructure, innovation, social programs — gets squeezed. And the political response is always the same: print more, borrow more, kick the can.
The same logic applies to your portfolio. Leverage feels like genius in a bull market. But when rates rise or liquidity dries up, that "genius" turns into forced selling at the worst possible time.
Debt is a tool. Used wisely, it builds. Used recklessly, it destroys. Most people — and most governments — don't know the difference until it's too late.