达利欧万字长文谈债务大周期：国家是如何破产的

周二，全球最大对冲基金桥水公司创始人瑞·达利欧在X发布推文，内容是他的未出版新书《国家如何破产》初稿的前言的第一章。

本书的第一章用七页的篇幅简短而完整描述一个典型债务大周期（长期债务周期）的发展机制。以下是文章亮点：

短期债务周期：当经济活动和通胀率低于预期时，利率相对于通胀较低，相对于其他投资的回报率而言较低时，货币和信贷很容易提供。这些条件鼓励借款消费和投资，从而导致资产价格、经济活动和通货膨胀回升，直到高于预期水平，此时货币和信贷受到限制，利率相对于通胀率和其他投资的回报率变得相对较高。这导致用于消费和投资的借款减少，从而导致资产价格下跌、经济活动放缓和通胀降低，进而导致利率下降，货币和信贷变得更加容易，周期重新开始。

长期债务周期：短期债务周期加起来会形成大型长期债务周期，信贷是一种兴奋剂，人们想要更多，所以就会偏向于创造信贷。这会导致债务随着时间的推移而上升，通常会导致债务的大部分短期周期性高点和低点高于以前。

中央银行可以救助中央政府，所以中央政府债务的风险是隐藏的。如果评级机构对债务因违约和贬值而贬值的风险进行评级，那么债权人将得到更好的服务。毕竟，这些债券应该是财富的储藏室，应该被如此评级。

债务大周期从健全/硬通货和信贷到日益宽松的货币和信贷，再到债务破灭，导致最后回归必要的稳健/硬通货和信贷。

在债务大周期的这一阶段开始时，最初的裂缝通常从私营部门蔓延到中央政府，然后蔓延到中央银行。债务资产的净抛售，尤其是政府债务资产的净抛售，是一个很大的危险信号。

长期债务周期的后期，当央行行长们努力将其刺激政策转化为增加支出时，储户、投资者和企业害怕借贷和支出和/或存在通货紧缩，因此他们获得的无风险利息对他们来说相对有吸引力。在这种时候，即使利率降至 0%（甚至低于 0%），也很难让人们停止现金储蓄。这一阶段的特点是经济进入通货紧缩、疲软或负增长期，人们和投资者囤积低风险的、通常是政府担保的现金。

经济景气时积累储蓄，经济萧条时就可以动用储蓄。储蓄过多和过少都要付出代价，没有人能够在两者之间取得完美的平衡。

债务危机提供了巨大的风险和机遇，如果投资者了解债务危机的运作方式，并掌握良好的应对原则，债务危机既能摧毁帝国，也能为投资者提供绝佳的投资机会。

以下是全文翻译：

介绍

一个国家的债务和债务增长有限制吗？

如果政府债务增长不放缓，利率及其所影响的一切将会发生什么变化？

像美国这样拥有主要储备货币的重要大国会破产吗——如果会，那会是什么样子？

有没有一种债务大周期可以让我们追踪，告诉我们何时该担心债务问题，以及该如何应对？

这些问题不仅仅是经济学家的学术问题，也是投资者、政策制定者和大多数人都必须回答的问题，因为这些答案将对我们所有人的福祉和我们应该做什么产生巨大影响，但目前尚无确切的答案。

目前，有些人认为政府债务和债务增长没有任何限制，尤其是在一个国家有储备货币的情况下。那是因为他们相信，如果储备货币的货币在世界范围内被广泛接受，那么它的中央银行总是可以印钞来偿还债务。其他人则认为，高水平的债务和快速的债务增长预示着一场即将到来的重大债务危机，但他们不知道危机将以何种方式、在何时爆发，也不知道会到来怎样的影响。

那么，长期债务周期呢？虽然“商业周期”被广泛认可，有些人也认识到它是由短期债务周期驱动的，但对于大型长期债务周期来说，情况并非如此。没有人承认或谈论它。我在教科书中找不到关于它的任何优秀研究或描述，即使是世界领先的经济学家——包括现在或过去正在管理中央银行和政府国债的经济学家——当我与他们一起探讨这个至关重要的主题时，他们也没有太多要说的，这就是我将这项研究进行并传递下去的原因。

在开始讨论这些之前，我应该先解释一下我的出发点，我不是以经济学家的身份来讨论这个话题的，我是一名全球宏观投资者，50多年来，我经历了许多国家的众多债务周期，对这些周期有了足够的了解和把握，并押注周期将如何发展下去。我仔细研究了过去100年的所有重大债务周期，并浅显地研究了过去500年中的更多债务周期，因此我相信我知道如何应对和把握债务周期。因为我现在深感担忧，所以我觉得有责任将这项研究传递给其他人，让他们自己评估。

为了理解，我像医生研究许多病例一样看待许多病例，检查它们背后的机制，以了解推动其进展的因果关系。我还从这些经历中学习，反思我学到的东西，把它写下来，让聪明的人阅读和质疑它。然后我构建系统，将赌注押在我学到的东西，并获得新的体验。我一遍又一遍地这样做，直到我死去，我喜欢这样做。因为我的游戏就是在市场上下注，而且债务市场几乎驱动着一切，所以几十年来我一直痴迷于研究债务动态。我相信，如果你了解这些动态，作为投资者、商人或政策制定者可以做得非常好，如果你不了解，你最终会受到它们的伤害。

通过我的研究，我发现存在长期的债务大周期，这些周期总是会导致巨大的债务泡沫和破灭。我看到，自1700年以来存在的大约750个货币/债务市场中，只有大约20%仍然存在，而所有这些剩余的市场都通过我在研究中描述的机械过程严重贬值。我看到了旧约中如何描述这个长期的债务大周期，几千年它是如何在中国朝代中反复上演的，以及它如何一次又一次地预示着帝国、国家和省份的衰落。

这些债务大周期总是以永恒、普遍一致的方式运作，这些方式但应该被很好地理解，但目前还没有。在这项研究中，我希望清楚地解释它们是如何运作的，我的描述将作为一个模板，可以用来了解金钱和债务的情况以及可能发生的事情。虽然我知道我将要描述的债务大周期模板以前没有经过审查，但我有信心它存在，因为我用它押注事情会如何发展赚了很多钱。我之所以传递它，是因为我现在正处于一个人生阶段，我想分享我所学到的、我发现有价值的东西。你可以用它做你喜欢的事情。

为什么我认为我理解了别人不理解的东西？

我推测这有几个原因。首先，这种动态没有得到广泛理解，因为长期债务大周期通常持续大约一生的时间—— 80 年（或多或少25年）左右，所以我们无法通过经验来了解它们。

其次，我们太关注发生在我们身上的事情，所以人们忽视了大局。我还认为，人们会对担心过多的债务有偏见，因为大多数人喜欢信贷赋予他们的消费能力，而且确实有许多关于债务危机的警告从未发生过。对2008年全球金融危机和PIIGS国家（葡萄牙、意大利、爱尔兰、希腊和西班牙）的欧洲债务危机等重大债务危机的记忆已经褪去，自从我们已经度过了它们之后，许多人认为政策制定者学会了如何管理它们，而不是将这些案例视为即将到来的更大危机的早期预警。

但不管是什么原因，这些动态被忽视的原因并不重要。我将描绘出发生的事情和原因，如果对我所说的有足够的兴趣，我的模板将接受评估，并将根据其优点来决定生死。

这让我想到了一个原则：

如果我们对事情的运作方式达不成一致，我们就无法就正在发生的事情或可能发生的事情达成一致。 出于这个原因，我需要列出我对机器工作原理的描述，并尝试与您和其他知识渊博的人进行多方，然后再继续探讨正在发生的事情和可能发生的事情。

在政府债务庞大且迅速增长的时代，如果不首先研究其他情况是如何发生的，就假设这次会与其他时期不同，这在我看来是一种危险的疏忽。这就像假设我们永远不会再发生内战或世界大战，因为它们在我们的有生之年从未发生过，而不研究过去导致它们的机制。（顺便说一句，我相信内战和世界大战今天也在发展。与我的其他书一样，我将对原型动态进行描述，然后看看不同的案例如何以及为什么发生不同，以便人们可以跟踪相对于模板的当前案例，并将正在发生的事情和可能发生的事情放在上下文中。这样，您既可以看到许多正在发生的案例，又可以窥见未来。将正在发生的事情与该模板进行比较，我相信我们正在进入中央政府和中央银行将“破产”的情况之一，这种情况以前已经发生过数百次，并造成了重大的政治和地缘政治后果。

这让我想到了一个重要的问题，长期债务周期只是共同构成我所说的整个大周期的几种相互关联的力量之一。例如，1） 债务周大期影响并受其影响 2） 国家内部政治和社会和谐与冲突的大周期，这些事件相互影响 3） 国家之间地缘政治和谐和冲突的大周期，这些周期反过来又受到影响 4） 重大自然灾害的影响，如干旱、洪水和流行病，以及 5） 重大新技术的发展。这五种力量加在一起，构成了和平与繁荣、冲突与萧条的整个大循环。 因为这些力相互影响，而且几乎影响所有事物，所以必须将它们放在一起考虑。这些力量是如何运作和互动的，以及现在正如何运作和互动，在我的书和视频《应对不断变化的世界秩序的原则》中有更详细的介绍，在本研究的第17章，即最后一章中也有较小程度的介绍。在这项研究中，我将主要关注债务大周期，尽管我们会看到许多关于债务大周期与其他力量相互作用以创造我们所走的道路的方式。

本研究由 4 个部分和 17 章组成。

第1部分描述了债务大周期，起初非常简单，然后以更完整和机械的方式发展，然后用一些方程式来展示机制，并预测可能发生的事情。

第2部分展示了35个债务大周期案例中实际发生的情况，在详细的模板中列出了典型的事件序列是如何发生的，并显示有助于确定周期发展程度的症状。

第3部分回顾了最近的债务大周期，该周期始于1944年第二次世界大战结束时，新的货币和世界秩序开始之际，并一直延续到现在。在那一部分，除了关注美国长期债务周期和整个大周期（因为它一直是世界主要的储备货币国家和世界领先大国，因此成为自1944年以来人们可以称之为美国世界秩序的世界主要塑造者）之外， 我还非常简要地描述了中国和日本的大周期，展示了从1860年代到现在的它们。这将使您更全面地了解自1944年以来世界上发生的事情，并提供另外两个债务大周期案例供您查看。

最后，在第 4 部分中，我将展望未来，看看我的计算结果如何说明美国管理其债务负担所需的条件，以及五大力量在未来几年可能如何展开。

因为我认识到，不同的读者的专业知识水平不同，他们希望为此付出的时间也不尽相同，我想帮助你从中获得你想要的东西，所以我把最重要的几点用粗体写出来，这样你就可以只阅读最基本的东西，并有选择地深入研究你感兴趣的细节。 我将我认为是永恒和普遍的原则用斜体字写成。如果您是一位真正对经济学和市场感兴趣的专业人士或有抱负的专业人士，我建议您阅读整篇文章，因为我相信它会给你一个你会喜欢的独特视角，并会帮助你在工作中取得成功。如果你不是，我建议你只读粗体部分。 另外，我很想和你进行双向对话，以尝试在什么是真实的以及如何应对它方面保持同步，所以我正在研究一些新技术来做到这一点，我稍后会告诉你。

在下一章中，我将用短短七页的篇幅来描述债务大周期。如果你想就此止步，那完全没问题。我希望这项研究的分析对您有所帮助。

第 1 部分：债务大周期概述

第 1 章：债务大周期

本章的目标是用七页的篇幅简短而完整描述一个典型债务大周期的机制。

机器如何工作

信贷是资助支出的主要工具，而且很容易创建。因为一个人的支出就是另一个人的收入，所以当产生大量信用时，人们会消费和赚取更多，大多数资产价格都会上涨，而且大多数人都喜欢它。偿还债务要糟糕得多。因此，中央政府和中央银行偏向于创造大量信用。信贷还会产生必须偿还的债务，这会产生相反的效果——即当必须偿还债务时，它会减少支出、降低收入和降低资产价格，这是人们不喜欢的。

换句话说，当某人（借款人-债务人）以一定的成本（利率）借款（称为本金）时，借款人-债务人在短期内可以花费比他们的收入和储蓄更多的钱。但从长远来看，这需要他们偿还（本金 + 利息），当他们必须偿还时，这需要他们花的钱比他们拥有的少。这种动态就是为什么信贷/支出/偿还债务动态本质上是周期性的。

短期债务周期

每个经历过多次短期债务周期并受到它影响的人都应该非常熟悉短期债务周期。首先，当经济活动和通胀率低于预期时，当利率相对于通胀较低，相对于其他投资的回报率而言较低时，货币和信贷很容易提供。这些条件鼓励借款消费和投资，从而导致资产价格、经济活动和通货膨胀回升，直到高于预期水平，此时货币和信贷受到限制，利率相对于通胀率和其他投资的回报率变得相对较高。这导致用于消费和投资的借款减少，从而导致资产价格下跌、经济活动放缓和通胀降低，进而导致利率下降，货币和信贷变得更加容易，周期重新开始。这些周期通常持续大约六年，或多或少三年。

短期债务周期加起来会形成大型长期债务周期

没有引起足够关注的是，这些短期债务周期如何累积成大型长期债务周期。因为信贷是一种创造兴奋的兴奋剂，人们想要更多，所以就会偏向于创造信贷。这会导致债务随着时间的推移而上升，通常会导致债务的大部分短期周期性高点和低点高于以前。

这些加起来就形成了长期债务周期，当它变得不可持续时，债务周期就会结束。在长期债务周期的早期，当债务负担较低且信贷/债务更有可能为高利润的努力提供资金时，与在周期后期债务负担较高且贷方的生产选择较少时，承担更多债务的能力是不同的。

在早期阶段，借款（甚至借很多钱）并偿还是很容易的。短期周期的早期，由前面描述的借贷和支出的可用性和经济性驱动的， 也是由对最近货币紧缩时期的痛苦的回忆所带来的挥之不去的谨慎所驱动的。在大债务周期的早期，当债务和总偿债额相对于收入和其他资产相对较低时，信贷、支出、债务和偿债的增加和减少主要由前面描述的风险较小的激励措施决定。但在大债务周期的后期，当债务和偿债成本相对于收入和可用于履行偿债义务的其他资产的价值而言变得较高时，违约风险会更高。

此外，在大债务周期的后期，当债务资产和负债相对于收入而言较多时，既要试图将利率保持在足够高的水平以满足贷款人-债权人，同时又不让利率对借款人-债务人来说太高，这一平衡行为变得更具挑战性。因为一个人的债务是另一个人的资产，两者都必须得到满足。因此，虽然短期债务周期因前面描述的经济考虑而结束，但长期债务周期结束是因为债务负担太大而无法持续。换句话说，因为借贷和消费更有趣，如果不小心，债务和债务偿还会像癌症一样增长，吞噬一个人的购买力并挤压其他消费。这就是长期大债务周期形成的原因。

几千年来，跨越各个国家，推动债务大周期并造成随之而来的大市场和经济问题的是，相对于现存的货币、商品、服务和投资资产的数量，产生了不可持续的大量债务资产和债务负担。

更简单地说，债务是交付资金的承诺。当做出的承诺多于兑现承诺的资金时，就会发生债务危机。当这种情况发生时，央行被迫在 a） 印大量钞票并将其贬值或 b） 不印钞并发生重大债务违约危机之间做出选择。最后，他们总是印钞和贬值。无论哪种方式——通过违约或贬值——产生过多的债务最终会导致债务资产（例如债券）贬值。

虽然这些案例的处理方式各不相同，但最重要的因素是债务是否以央行可以“印制”的货币计价。但无论变化如何，我们几乎总是看到，相对于持有经济的生产能力（即股票）和/或拥有其他更稳定的货币形式（例如黄金），持有债务资产（即债券）变得相对不可取。

在我看来，有趣且不恰当的是，当信用评级机构对中央政府的信用进行评级时，他们不会对其债务贬值的风险进行评级。他们只对债务违约风险进行评级，这给人一种错误印象，即所有评级较高的债务都是安全的价值储备。换句话说，因为中央银行可以救助中央政府，所以中央政府债务的风险是隐藏的。如果评级机构对债务因违约和贬值而贬值的风险进行评级，那么债权人将得到更好的服务。毕竟，这些债券应该是财富的储藏室，应该被如此评级。正如您将在本研究中看到的那样，这就是我对债券的看法。对于债务以本国货币计价（即以他们可以印制的货币）计价的国家，我将中央政府的债务与中央银行分开评级，以显示它们的风险有多大，我通过考虑货币贬值的风险来评估中央银行债务的风险，以及政府债务违约的风险。

违约或贬值，我不在乎。我关心的是失去我的财富储备，这不可避免地会以某种方式发生。

跟踪债务周期的进展

短期债务周期和长期债务周期之间的主要区别在于央行扭转债务周期的能力。对于短期债务周期，它的收缩阶段可以通过大量的货币和信贷来逆转，使经济从萧条的通货紧缩状态中恢复过来，因为经济有能力产生另一个阶段的非通胀增长。但长期债务周期的收缩阶段无法通过生产更多的货币和信贷来逆转，因为现有的债务增长和债务资产水平是不可持续的，债务资产的持有者想要摆脱它们，因为他们认为，无论如何，他们都会成为贫穷的财富持有者。

将长期债务周期的进展想象成疾病或生命周期，在不同的阶段，会表现出不同症状。通过识别这些症状，人们可以大致确定周期的进展位置，并对它从那里可能如何发展的一些预期。

简单地描述一下，债务大周期从健全/硬通货和信贷到日益宽松的货币和信贷，再到债务破灭，导致最后回归必要的稳健/硬通货和信贷。更具体地说，起初是私营部门可以偿还的健康借款；然后，私营部门过度借贷，出现亏损，难以偿还；然后政府部门试图提供帮助，过度借贷、亏损，并且难以偿还；然后，中央银行试图通过“印钞”和购买政府债务来提供帮助，但在偿还方面遇到了问题，这导致它尽可能地将更多的债务货币化（即，如果债务以它可以印钞的货币计价）。虽然并非所有病例都以完全相同的方式进展，但大多数病例会经历以下五个阶段：

1） 稳健的货币阶段：当净债务水平较低时，货币稳健，国家具有竞争力，债务增长推动生产率增长，从而创造足以偿还债务的收入。这导致金融财富和信心的增加。

信贷是交付资金的承诺，与需要在以后付款的信用不同，货币结算交易——即，如果给钱，交易就完成了，而如果给了信用，则欠款。创造信用很容易。任何人都可以创造信用，但不是任何人都可以创造货币。例如，我可以通过接受您的承诺来创造信用，即使您没有钱。因此，信用很容易增长，因此信用比货币多得多。

最有效的货币既是交换媒介，也是世界范围内广泛接受的财富储存库。在长期债务周期的早期阶段，货币是“硬的”，这意味着它是一种交换媒介，也是财富的储存库，这些财富不能轻易增加供应，例如黄金、纯银和比特币。像比特币这样的加密货币现在正在成为一种公认的硬通货，它是一种在世界范围内被广泛接受且供应有限的货币。货币成为无效财富储存库的最大、最常见的风险是创造大量财富的风险。想象一下拥有创造货币的能力，谁不会忍不住做很多这样的事呢？那些可以的人总是如此。这就造成了长期债务周期。

在大债务周期的早期，a） 货币通常是硬同伙——例如黄金——像货币一样流通的纸币可以以固定价格兑换成“硬通货”，并且 b） 未偿还的纸币和债务（支付货币的承诺）并不多。大债务周期包括 a） “纸币”和相对于 b） “硬通货”和实物资产（例如商品和服务）的债务资产/负债的积累，以及相对于偿还债务所需的收入。

基本上，债务大周期的运作方式就像庞氏骗局或音乐椅一样，投资者持有越来越多的债务资产，相信他们可以将它们转化为具有购买力的货币来获得真实的东西，但随着这种信仰所持有的债务资产相对于实物资产增加， 这种转换显然变得越来越不可能，直到意识到这一点，并开始出售债务以获得硬通货和实物资产。

在债务周期的早期阶段，私人和政府债务和偿债比率为 1） 相对于收入较低和/或 2） 相对于流动资产较低。例如，政府债务和偿债相对于政府税收较低和/或相对于可以轻松转换为货币的政府流动资产（例如储备和其他储蓄，如主权财富资产）较低。例如，当我们所处的债务大周期始于 1944 年时，a） 美国政府债务和 b） 美国货币供应量除以美国政府拥有的黄金数量的比率分别等于 a） 7 倍和 b） 1.3 倍，而现在这些比率分别为 a） 37 倍和 b） 6 倍。

在这一周期的早期阶段，债务水平、债务增长、经济增长和通货膨胀既不太热也不太冷，财务状况都很稳健。

在周期的这个阶段，相对于“安全”资产，“风险资产”相对便宜。那是因为对前一时期造成巨大损害的记忆会影响心理和定价。例如，在1940年代末和1950年代初，股票收益的收益率大约是债券收益率的4 。

在这个阶段，有一个健康的经济和良好的投资回报，可以进入下一阶段。

2） 债务泡沫阶段：债务和投资增长大于所产生的收入所能支付。

在这个阶段，资金很容易获得且便宜，出现了债务融资的经济扩张和经济繁荣。大量债务融资购买推动了商品、服务和投资资产的需求和价格上涨，市场情绪非常乐观，而且按照大多数传统衡量标准，市场定价过高。

在这个阶段，通常会有一些令人惊叹的新发明，这些发明真正具有变革性，投资者投资于这些发明，而没有能力也不关心评估其未来现金流的现值是大于还是小于其成本。

这种态势最终会产生泡沫，表现为为投机提供资金的债务和还本付息的增长率，高于偿还债务所需的收入增长率。

在这一阶段，市场和经济似乎很好，大多数人都相信它们会变得更好，它们通过大量借贷获得资金，“财富”被无中生有地创造出来。我所说的 "无中生有 "是指想象中的财富比实际存在的财富更多。

举例来说，泡沫时期的特征包括债务增长速度明显快于收入增长速度，资产价格相对于未来现金流现值的传统衡量标准偏高，以及我在泡沫指标中衡量的许多其他因素。(当代的一个例子是估值超过 10 亿美元的独角兽企业，其所有者在纸面上已成为 "亿万富翁"，但只筹集到5000万美元的资金，因为投机性风险资本家投入资金是为了获得类似期权的筹码，以防企业发展良好。泡沫可以持续一段时间后才见顶。然而，它们不可避免地会进入下一阶段。

3） 顶峰阶段：泡沫破裂并出现信贷/债务/市场/经济收缩。

泡沫破灭是由于货币紧缩和之前的债务增长率不可持续，就是这么简单。

当泡沫破灭时，就会开始自我强化的收缩，因此债务问题会像侵袭性癌症一样迅速蔓延，所以政策制定者必须迅速应对，要么扭转局面，要么引导去杠杆化结束。在大多数情况下，可以通过给系统大量导致债务问题的物质，即通过创造更多的信用和债务，来暂时逆转债务收缩。这种情况一直持续到它不能再继续下去，这时发生了一次大规模的去杠杆化。

4） 去杠杆阶段：债务和偿债水平痛苦地下降，以与收入水平保持一致，从而使债务水平可持续。

在债务大周期的这一阶段开始时，最初的裂缝通常从私营部门蔓延到中央政府，然后蔓延到中央银行。债务资产的净抛售，尤其是政府债务资产的净抛售，是一个很大的危险信号。当这种情况发生时，除非中央政府和中央银行管理得非常好，而且迅速采取有效措施，否则情况将迅速恶化。这种抛售以挤兑银行的形式出现。我所说的“银行挤兑”是指上交债务资产以获得真金白银，而像银行这样的贷方没有足够的钱。当债务问题变得明显时，债务资产的持有人会出售他们的债务资产，从而推高债务利率。这使得债务更难偿还，因此风险更大，从而推高利率。

出售政府债务导致 a） 自由市场驱动的货币和信贷紧缩，从而导致 b） 经济疲软，c） 货币下行压力，以及 d） 由于中央银行试图捍卫货币，外汇储备下降。经典的情况是，这些挤兑会加速并自食其果，债务资产的持有者会以某种方式（通过违约或通过货币贬值）失去他们认为储存在这些债务资产中的购买力，从而导致市场价值和财富发生巨大变化，直到债务违约。

由于这种紧缩政策被证明对经济危害太大，央行最终在放宽信贷并同时允许货币贬值，货币贬值本身就是出售债务资产的原因，因为它成为不良的财富储存库。因此，无论是货币紧缩导致债务违约和经济不景气，还是货币宽松导致货币和债务资产贬值，都对债务资产不利。这种动态创造了所谓的死亡螺旋，因为它是一种自我强化的债务收缩动态，其中不断上升的利率会导致债权人看到的问题，导致他们出售债务资产，从而导致更高的利率或需要印更多的钱，这会使货币贬值，导致更多的债务资产和货币出售等等，直到螺旋结束。

当政府债务发生这种情况时，意识到债务过多是问题所在，自然会导致削减支出和借款的倾向。 然而，因为一个人的支出是另一个人的收入，所以在这种时候削减支出通常只会导致债务收入比的增加。这通常是政策转向债务重组和债务货币化的组合时，选择的组合主要取决于以该国货币计价的债务数量。这种债务违约、债务重组和/或货币化减少了相对于收入的债务负担，直到达到新的均衡。向稳定均衡的转变通常要通过几次痛苦的调整，因为在确保的财务稳健性之前就已经实现了临界财务稳健性。

经典去杠杆过程的进行如，在这个衰退/萧条阶段的早期，各国央行会降低利率并提高信贷的可得性。

当 a） 债务规模庞大且债务收缩正在进行中，b） 利率不能再降低（即当利率下降到 0% 左右时），c） 对政府债务的需求不足，以及 d） 货币宽松不足以抵消自我强化的萧条压力时，央行被迫转向新的“工具”来刺激经济。

通常，为了刺激经济，央行必须将利率降低到低于名义经济增长率、通货膨胀率和债券利率，但当它们接近0%时，就很难做到这一点了。与此同时，中央政府通常会让自己陷入更多的债务中，因为税收收入下降，支持私营部门的支出增加，但私营部门没有足够的需求来购买这些债务。中央政府经历了债务紧缩，即自由市场对其债务的需求不足。如果债务出现净抛售，那会产生更糟糕的问题。

在周期的去杠杆化阶段，通常会出现“推绳子困局”，这是政策制定者在 1930 年代创造的短语。它发生在长期债务周期的后期，当央行行长们努力将其刺激政策转化为增加支出时，储户、投资者和企业害怕借贷和支出和/或存在通货紧缩，因此他们获得的无风险利息对他们来说相对有吸引力。在这种时候，即使利率降至 0%（甚至低于 0%），也很难让人们停止现金储蓄。这一阶段的特点是经济进入通货紧缩、疲软或负增长期，人们和投资者囤积低风险的、通常是政府担保的现金。

在这个阶段，中央银行必须做出选择，是保持“硬”性货币，导致债务人债务违约，这将导致通货紧缩萧条，或者通过大量印钞来使货币“软”化，这将使货币和债务贬值。因为用硬通货偿还债务会导致如此严重的市场和经济衰退，所以当面临这种选择时，中央银行最终总是选择印钞和贬值。当然，每个国家的中央银行只能印制该国的货币，这就引出了我的下一个重要观点。

在这个阶段，如果中央央行拥有“印钞”能力，中央银行就会创造大量的货币和信用，并积极地向市场投掷。它通常购买政府债务和具有系统重要性的实体的债务，这些实体有违约风险（以弥补私营部门对债务的不足，并人为地将利率保持在低水平），有时还会购买股票，为人们购买商品、服务和金融资产创造激励。

在这个阶段，货币贬值通常也是可取的，因为这会刺激经济并提高通胀率，从而抵消通货紧缩压力。如果货币与黄金、白银或其他东西挂钩，则该链接通常会断开，并转向法定货币体系。如果货币没有挂钩——即如果该货币已经是法定货币——相对于其他财富和其他货币的储备，使其贬值是有帮助的。在某些情况下，央行的举措可能会推高名义利率，要么是因为央行收紧货币政策以对抗通胀，要么是因为它没有收紧货币来对抗通胀，债务持有人不想购买新发行的政府债务和/或他们想出售它因为它不能提供足够的回报。重要的是要观察实际和名义利率以及债务的供求情况，以了解正在发生的事情。在这种时候，征收特别税收和资本管制等非常政策就会变得很普遍。

去杠杆化阶段通常是一个痛苦的时期，违约、重组和/或贬值会减轻债务负担，这时不可避免地会发生债务重组和债务货币化的激进组合，以减轻相对于收入的债务和偿债负担。在典型的去杠杆化中，债务收入比降低约 50%，或多或少约 20%。它可以做得好，也可以做得很差。

当它做得好时，我称之为“美丽的去杠杆化”，中央政府和中央银行同时以平衡的方式进行债务重组和货币刺激。重组减轻了债务负担并且是通货紧缩的，而货币刺激也减轻了债务负担（通过提供货币和信贷使购买债务更容易），但会造成通胀性、刺激经济，因此，如果它们取得正确的平衡，就会出现正增长，债务负担下降和可接受的通货膨胀。

无论做得好还是坏，这都是大债务周期的阶段，可以减轻大量债务负担，并为下一个债务大周期的开始奠定基础。

5） 债务危机消退：达到新的平衡，新一轮周期开始。

为了拥有一个可行的货币/信用/债务体系，必须 a） 货币/债务足够健全，可以成为可行的财富储存库；b） 债务和偿债负担与服务他们的收入一致，以便债务增长是可持续的；c） 债权人和债务人都相信这些东西会存在； d） 货币和信贷的可得性以及实际利率开始与贷款人-债权人和借款人-债务人的需求保持一致。

在大周期的后期阶段，这些事情往往会发生，它需要心理和根本上的调整。在大规模去杠杆化之后，通常很难说服贷方债权人放贷，因为他们在去杠杆化过程中经历的贬值/重组使他们厌恶风险，因此中央政府和央行必须采取恢复信誉的行动。这些通常涉及通过以下方式整理他们的财务：a） 中央政府赚的钱多于花的钱和/或 b） 中央银行通过提供高实际收益率、提高准备金和/或将货币与黄金或强势货币挂钩来再次使货币变得“坚硬”。通常，在这个阶段，利率需要相对于通货膨胀率相对较高，并且足以弥补货币疲软，因此成为贷方是值得的，而成为借款人的成本很高。周期的这一阶段对贷方-债权人来说可能非常有吸引力。

大债务周期所处的阶段也反映在所使用的货币政策类型上。 随着债务大周期的发展，各国央行必须改变他们运行货币政策的方式，以保持信贷/债务/经济扩张的持续，因此通过观察他们正在使用的货币政策类型，人们可以推测大债务周期处于哪个阶段。 货币政策的各个阶段及其导致这些阶段的条件如下：

第 1 阶段：挂钩（即硬通货）货币体系（MP1）。

这是从 1944 年到 1971 年存在的货币政策类型。这种类型的货币政策在债务泡沫破裂时结束，并且存在前面描述的“银行挤兑”动态，即从信贷资产挤兑到硬通货，而有限的硬通货数量会导致大规模违约。这产生了一种强烈的印钞欲望，而不是让货币的供应受到现存的黄金或硬通货供应的限制，以便以承诺的价格进行交易。

第 2 阶段：法定货币、利率驱动的货币政策 （MP2）。

在此阶段，利率、银行准备金和资本要求也是信贷/债务增长金额的控制因素。这个法定货币政策阶段既提供了更大的灵活性，又提供了较少的保证，即印钞不会太大以至于货币和债务资产贬值。美国从1971年到2008年一直处于这一阶段。当利率变化不再有效（例如，利率达到 0%，需要放松货币政策）和/或私人市场对所创造的债务的需求不足于正在出售的供应时，它就会结束，因此，如果中央银行不印钞并购买债务， 货币和信贷将更加紧缩，利率将高于预期。

第 3 阶段：债务货币化 （MP3） 的法定货币体系。

这种类型的货币政策是由中央银行利用其创造货币和信贷的能力来购买投资资产来实施的。当利率无法再降低，并且私人市场对债务资产（主要是债券和抵押贷款，但也可能包括股票等其他金融资产）的需求不足以以可接受的利率购买供应时，它是首选选择。它对金融资产价格有利，因此它往往不成比例地使那些拥有金融资产的人受益。它不会有效地将资金送到那些经济压力最大的人手中，也不会很有针对性。美国从2008年到2020年一直处于这一阶段。

第 4 阶段：具有协调的大额财政赤字和大额债务货币化政策 （MP4） 的法定货币系统。

当为了使系统良好运行时，使用这种类型的货币政策，中央政府财政政策和中央银行货币政策必须协调，以便将货币和信贷送到最需要的人和实体手中。虽然创造货币和信用通常可以暂时缓解债务问题，但它并不能解决问题。

第 5 阶段：大幅去杠杆化 （MP5）。

这时必须通过债务重组和/或债务货币化大幅减少债务和偿债支付。如果以最佳方式进行管理——我称之为漂亮的去杠杆化——减轻债务负担的通货紧缩方式（通过债务重组）与减轻债务负担的通胀方式（通过货币化）相平衡，那么去杠杆化不会产生不可接受的通缩或通胀。

要记住的债务大周期顺序是：首先，私营部门过度借贷，出现亏损，并且难以偿还（即债务危机）；然后，为了提供帮助，政府过度借贷，出现亏损，并且难以偿还；然后，为了提供帮助，中央银行购买政府债务并承担损失。为了为这些购买提供资金，并为其他陷入困境的债务人提供资金（因为它是“最后贷款人”），中央银行印制了大量货币并购买了大量债务。然后，在最坏的情况下，央行会因购买的债务而损失大量资金。

虽然据说现代中央银行“印钞”来购买债务，但中央银行并不是字面上的“印钞”。相反，它从商业银行借款（准备金），并支付非常短期的利率。在最极端的情况下，中央银行可能会亏损，因为它从购买的债务中获得的利息收入低于它必须为借入的钱支付的利息，当这些金额变得很大时，它可能会发现自己处于不得不购买债务的自我强化螺旋中。这导致它出现亏损和负现金流，并需要印制更多的钞票来偿还债务，购买更多的债务，这最终会产生更多的损失，这需要它做更多同样的事情。这就是我之前提到的 “死亡螺旋”。

大量“印制”会使货币贬值并造成通货膨胀的衰退或萧条，如果利率上升，央行的债券持有量就会亏损，它必须为其负债支付的利率高于它从购买的债务资产中获得的利率。这是值得注意的，但并不是一个很大的危险信号，除非央行拥有非常大的负净资产，被迫“印制”更多的货币来弥补进账少于负债出账而出现的负现金流。 这就是我所说的央行破产的意思：虽然央行没有债务违约，但如果不印钞票，就无法偿还债务。

最终，债务重组和债务货币化减少了债务相对于收入的规模，债务周期顺其自然结束。

第 6 阶段：回归硬通货 （MP6）。

在这个阶段，中央政府采取行动恢复其货币和信用/债务的稳健性，这种类型的货币政策发生在债务通过债务违约/重组和债务货币化减记之后，因此相对于可用于偿还债务的收入和金额的债务水平可以恢复一致。如前所述，这是在持有债务资产的人因违约和/或通货膨胀时期而被烧毁之后发生的，因此必须重建持有债务资产的信心。在这个阶段，各国通常会回到 MP1（即硬资产支持货币政策）或 MP2（以利率/货币供应为目标的货币政策），通过高实际利率对贷方债权人有利。

对于拥有伟大帝国的伟大国家来说，债务大周期的结束意味着它们突出地位的终结。

一些结论性观察

经济景气时积累储蓄，经济萧条时就可以动用储蓄。储蓄过多和过少都要付出代价，没有人能够在两者之间取得完美的平衡。

大型债务危机是不可避免的，纵观历史，只有极少数纪律严明的国家避开了它们。这是因为相对于偿还债务所需的收入，贷款从来都不是完美的。而且它往往做得很糟糕，因为人们总是想要更多的信贷，而这变成了债务。

债务水平超出了可持续的水平，就需要降低债务负担，这通常会导致债务违约/重组以及货币和信贷的创造，从而引发债务危机的发生。而人们的心理强化了这个循环：泡沫期使人们更加乐观，导致他们借款更多，而萧条期使人们更加悲观，导致他们削减支出。 尽管这种发展在历史上发生过很多次，但大多数政策制定者和投资者认为他们目前的情况和货币体系不会改变。这种变化是不可想象的，而且它发生得很突然。

预测债务危机发生的最佳方法不是关注单一的影响力或数字，如债务占 GDP 的百分比；而是通过理解和关注我们将要讨论的许多相互关联的动态，尤其是在接下来的两章中，我们将对这些动态因素进行深入探讨。

如果债务以一国本国货币计价，该国央行可以而且将会“印钞”以缓解债务危机。 这使他们能够比不能印钞更好地管理债务，但当然它也降低了货币的价值。如果债务不是以中央银行可以印钞的货币计价的，那么它们将出现债务违约和通货紧缩萧条，这些债务以他们所欠且无法印钞的货币来衡量。

所有债务危机，即使是重大的危机，都可以通过经济政策制定者对其进行重组和货币化来管理，从而减轻债务负担的通货紧缩方式（即注销和重组债务）和减轻债务负担的通胀方式（创造货币和信贷并将其提供给债务人，使他们更容易偿还债务）相互平衡。关键是随着时间的推移分摊回报，例如如果债务收入比需要下降约50%才能使其持续下去，那么将其分散为每年3%或 4%的债务重组，将比一年内降低约50%的债务重组要小得多。

债务危机提供了巨大的风险和机遇，如果投资者了解债务危机的运作方式，并掌握良好的应对原则，债务危机既能摧毁帝国，也能为投资者提供绝佳的投资机会。

如果您试图精确地关注债务周期或将注意力集中在短期内，您将看不到它们。 这就像比较两片雪花，却忽略了它们几乎相同，因为它们并不完全相同。

一言以蔽之。

在本研究的其余部分，我将更深入地探讨这一机制，展示已经上演了的35个案例实际原型案例，包括从1944年开始的其他大周期（例如，内部和外部秩序的周期），我们目前处于后期阶段，相对于这个模板是如何发生的。 并简要介绍一下中国和日本的大周期以及许多其他案例。

日本的情况很有趣，因为日本在其大债务周期中走得更远。值得注意的是，其巨额债务和债务货币化导致其货币和债务贬值，这导致其债券持有人自2013年以来相对于持有美元债务的损失为45%，相对于持有黄金的损失为60%。在最后几章中，我将分享我是如何根据这一模板来处理当今美国的问题的，美国可以如何降低严重债务危机的风险，以及我是如何解读当今的五大力量。

以下为英文版全文：

Are there limits to a country’s’ debt and debt growth?

What will happen to interest rates and all that they affect if government debt growth isn’t slowed?

Can a big, important country that has a major reserve currency like the US go broke—and, if so, what would that look like?

Is there such a thing as a “Big Debt Cycle” that we can track that will tell us when to worry about debt and what to do about it?

These aren’t just academic questions for academic economists. They are questions that investors, policy makers, and most everyone must answer because the answers will have huge effects on all our well-beings and what we should do. But definitive answers don’t currently exist.

At this time, some people believe that there isn't any limit to government debt and debt growth, especially if a country has a reserve currency. That’s because they believe that the central bank of a reserve currency country that has its money widely accepted around the world can always print the money to service its debts. Others believe that the high levels of debt and rapid debt growth are harbingers of a big debt crisis on the horizon, but they do not know exactly how and when the crisis will come—or what its impacts will be.

And what about the big, long-term debt cycle? While the “business cycle” is widely acknowledged and some people recognize that it is driven by a short-term debt cycle, that is not true for the big, long-term debt cycle. Nobody acknowledges it or talks about it. I couldn’t find any good studies or descriptions of it in textbooks, and even the world’s leading economists—including those who are now running, or in the past ran, central banks and government Treasuries—didn’t have much to say about this critically important subject when I explored it with them. That is why I did this study and am passing it along.

Before I get into all that, I should begin by explaining where I’m coming from. I don’t come to this subject as an economist. I come as a global macro investor who for over 50 years has been through many debt cycles in many countries and has had to navigate and understand them well enough to bet on how they would go. I have carefully studied all the big debt cycles over the last 100 years, and superficially studied many more from the past 500 years, so I believe that I understand how to navigate them. Because I am now deeply concerned, I feel a responsibility to pass along this study for others to assess for themselves.

To gain my understanding, I look at many cases like a doctor studies many cases, examining the mechanics behind them to understand the cause/effect relationships that drive their progressions. I also learn from being in these experiences, reflecting on what I learn, writing it up, and having smart people read and challenge it. Then I build systems to place my bets on what I learned and have new experiences. I do that over and over and will do it until I die because I love it. Because my game has been to bet on the markets and because the debt markets drive just about everything, I have been obsessed with studying debt dynamics for decades. I believe that if you understand these dynamics, you can do very well as an investor, businessperson, or policy maker, and if you don’t, you ultimately will be hurt by them.

Through my research, I discovered that there are big, long-term debt cycles that have unfailingly led to big debt bubbles and busts. I saw that only about 20% of the roughly 750 currency/debt markets that have existed since 1700 remain and that all these remaining ones have been severely devalued through the mechanistic process I am going to describe in this study. I saw how this big, long-term debt cycle was described in the Old Testament, how it repeatedly played out in Chinese dynasties over thousands of years, and how time and again it has foreshadowed the fall of empires, countries, and provinces.

These Big Debt Cycles have always worked in timeless and universally consistent ways that are not well understood but should be. In this study, I hope to explain how they work with such clarity that my description will serve as a template that can be used to see what is going on with, and what is likely to happen to, money and debt. While I recognize that the Big Debt Cycle template I will describe has not previously been vetted, I am confident it exists because I have made a lot of money using it to bet on how things would go. I am passing it along because I am now at a stage of life in which I want to share what I have learned that I have found of value. You can do what you like with it.

Why do I think I understand something that others don’t? I theorize that this is for a few reasons. First, this dynamic is not widely understood because big, long-term debt cycles typically last about one lifetime—roughly 80 years (give or take 25 years)—so we don’t get to learn about them through experience. Second, because we focus so much on what is happening to us at the time it is happening, people overlook the big picture. I also think there are biases against being concerned about too much debt because most people like the spending ability that credit gives them, and it is also true that there have been many warnings about pending debt crises that never happened. Memories of big debt crises like the 2008 global financial crisis and the European debt crisis of the PIIGS countries (Portugal, Italy, Ireland, Greece, and Spain) have faded, and since we have gotten past them, many people assume that policy makers learned how to manage them rather than view these cases as early warnings of bigger crises on the horizon. But whatever the reason, it doesn’t matter exactly why these dynamics are overlooked. I am going to paint a picture of what happens and why, and if there is enough interest in what I’m saying, my template will be assessed and will live or die on its merits.

That leads me to a principle:

• If we don’t agree on how things work, we won’t be able to agree on what’s happening or what is likely to happen. For that reason, I need to lay out my picture of how the machine works and try to triangulate with you and other knowledgeable people about it before moving on to look at what’s happening and what might happen.

At a time when government debt is large and increasing rapidly, it seems to me dangerously negligent to assume that this time will be different from other times without first studying how other cases transpired. It would be like assuming that we will never have a civil war or world war again because they haven’t happened before in our lifetimes without studying the mechanics that brought them about in the past. (By the way, I believe that both the civil war and world war dynamics are also going on today.) As in my other books,[1] I will create a description of the archetypical dynamic and then look at how and why different cases transpired differently so that one can track current cases relative to the template and put into context what’s happening and what’s likely to happen. In that way, you will both see many cases of this happening and get a peek into the future. Comparing what is happening with that template leads me to believe that we are heading into one of those cases in which central governments and central banks will “go broke” in the ways that have happened hundreds of times before and have had big political and geopolitical consequences.

This brings me to an important point. The Big Debt Cycle is just one of several interrelated forces that together make up what I call the overall Big Cycle. For example, 1) Big Debt Cycles influence and are affected by largely coinciding 2) big cycles of political and social harmony and conflict within countries that are both affected by and affect 3) big cycles of geopolitical harmony and conflict between countries. These cycles in turn are affected by both 4) big acts of nature, like droughts, floods, and pandemics and 5) developments of big new technologies. Combined, these five forces make up the overall Big Cycle of peace and prosperity and conflict and depression. Because these forces affect each other and practically everything, they must be thought of together. How these forces have worked and interacted and are working and interacting now is covered in much greater detail in my book and video titled Principles for Dealing with the Changing World Order and to a lesser extent in Chapter 17 of this study, which is the concluding chapter. In this study, I will be mostly focusing on the Big Debt Cycle, though we will see many references to the ways in which the Big Debt Cycle interacts with the other forces to create the path that we are on.

This study consists of four parts and 17 chapters. Part 1 describes the Big Debt Cycle, at first very simply, then in a more complete and mechanical way, and then with some equations that show the mechanics and help with making projections of what is likely to happen. Part 2 shows what has actually happened across 35 Big Debt Cycle cases, laying out in a detailed template the typical sequence of events that signifies how a cycle is transpiring and shows symptoms that can help identify how far the cycle has progressed. Part 3 reviews the most recent Big Debt Cycle, which started when the new monetary and world orders began in 1944 at the end of World War II and brings it up to the present. In that part, in addition to looking at the Big Debt Cycle and the overall Big Cycle with a focus on the US (because it has been the world’s major reserve currency country and the world’s leading power, thus making it the world’s leading shaper of what one might call the American world order since 1944), I also very briefly describe the Big Cycles of both China and Japan, showing them from the 1860s until now. This will give you a more complete picture of what has happened in the world since 1944 and provide two other Big Debt Cycle cases to look at. Finally, in Part 4, I will peek into the future, looking at what my calculations say about what is required for the US to manage its debt burden, and how the five big forces might unfold in the years ahead.

Because I recognize that there are different readers who have different levels of expertise and want to give different amounts of time to this and I want to help you get what you want out of this, I put the most important points in bold so you can read just the most essential stuff and optionally dive into the details that interest you. I put what I believe are timeless and universal principles in italics. If you are a professional or aspiring professional who is really into economics and markets, I recommend that you read the whole thing because I believe that it will give you a unique perspective that you will enjoy and will help you to be successful in your job. If you are not, I recommend that you just read what is in bold. Also, because I’d love to have a two-way conversation with you to try to get in sync about what’s true and what to do about it, I am working on a few new technologies for doing that, which I will tell you about later.

In the next chapter, I will describe the Big Debt Cycle in just seven pages. If you want to stop there, that’s perfectly fine.

I hope that you will find the study’s analysis helpful.

Part 1: Overview of the Big Debt Cycle

Chapter 1: The Big Debt Cycle in a Tiny Nutshell

My goal for this chapter is to convey in seven pages a very brief but complete description of the mechanics of a typical Big Debt Cycle.

How the Machine Works

Credit is the primary vehicle for funding spending and it can easily be created.[2] Because one person’s spending is another’s earnings, when there is a lot of credit creation, people spend and earn more, most asset prices go up, and most everyone loves it. Paying back debt is much less enjoyable. As a result, central governments and central banks have a bias toward creating a lot of credit. Credit also creates debt that has to be paid back, which has the opposite effect—i.e., when debts have to be paid back, it creates less spending, lower incomes, and lower asset prices, which people don’t like. In other words, when someone (a borrower-debtor) borrows money (called principal) at a cost (an interest rate), the borrower-debtor can spend more money than they have in earnings and savings over the near term. But over the long term, this requires them to pay back (the principal + interest) and when they have to pay it back, it requires them to spend less money than they have. This dynamic is why the credit/spending/debt-paying-back dynamic is inherently cyclical.

The Short-Term Debt Cycle

Everyone who has been around long enough to be affected by it several times should be well-acquainted with the short-term debt cycle. It starts with money and credit being provided readily when economic activity and inflation are lower than desired, and when interest rates are low relative to inflation rates and low in relation to the rates of return on other investments. Those conditions encourage borrowing to spend and invest, which causes asset prices, economic activity, and inflation to pick up until they are higher than desired, at which time money and credit are restrained, and interest rates become relatively high in relation to inflation rates and rates of return on other investments. This leads to less borrowing to spend and invest, which leads to lower asset prices, a slowing of economic activity, and lower inflation, which leads interest rates to come down, money and credit to become easier, and the cycle to begin again. These cycles have typically lasted about six years, give or take three years.

Short-Term Debt Cycles Add up to Big, Long-Term Debt Cycles

What isn’t paid enough attention is the way in which these short-term debt cycles add up to big, long-term debt cycles. Because credit is a stimulant that creates a high, people want more of it, so there is a bias toward creating it. This leads debt to rise over time, which typically leads to most of the short-term cyclical highs and lows in debt to be higher than the ones before. These add up to create the long-term debt cycle, which ends when it becomes unsustainable. The capacity to take on more debt is different early in the Big Debt Cycle when debt burdens are lower and there is more potential for credit/debt to be able to fund highly profitable endeavors than it is later in the cycle when debt burdens are higher, and lenders have fewer productive options.

In that early part, it is easy to borrow—even to borrow a lot—and pay it back. These early short-term cycles are primarily driven by the previously described availability and economics of borrowing and spending, and also a lingering cautiousness brought about by memories of the pain of the most recent time when money was tight.[3] Early in the Big Debt Cycle, when debts and total debt service are relatively low in relation to incomes and other assets, increases and decreases in credit, spending, debt, and debt service are primarily determined by the previously described incentives with less risk. But late in the Big Debt Cycle, when debts and debt service costs get high relative to income and the value of other assets that can be used to meet one’s debt service obligations, the risks of default are higher. Also, late in the Big Debt Cycle, when there are a lot of debt assets and liabilities relative to income, the balancing act of trying to keep interest rates high enough to satisfy lender-creditors without having them too high for borrower-debtors becomes more challenging. That’s because one person’s debts are another’s assets and both must be satisfied. So, while short-term debt cycles end because of the previously described economic considerations, long-term debt cycles end because the debt burdens are too great to be sustained. Said differently, because it is more enjoyable to borrow and spend, if one isn’t careful, debt and debt service can grow like a cancer, eating up one’s buying power and squeezing out other consumption. This is what makes the long-term Big Debt Cycle.

Throughout the millennia and across countries, what has driven the Big Debt Cycle and has created the big market and economic problems that go along with it is the creation of unsustainably large amounts of debt assets and debt liabilities relative to the amounts of money, goods, services, and investment assets in existence.

Said more simply, a debt is a promise to deliver money. A debt crisis occurs when there have been more promises made than there is money to deliver on them. When that happens, the central bank is forced to choose between a) printing a lot of money and devaluing it or b) not printing a lot of money and having a big debt default crisis. In the end, they always print and devalue. Either way—via default or devaluation—the creation of too much debt eventually causes debt assets (e.g., bonds) to be worth less.

While there are variations in how each of these cases plays out, the most important factor is whether the debt is denominated in a currency that the central bank can “print”. But no matter the variation we almost always see that it becomes relatively undesirable to hold the debt assets (i.e., bonds) relative to holding the productive capacity of the economy (i.e., equities) and/or owning other, more stable forms of money (e.g., gold).

To me it is interesting and inappropriate that, when credit rating agencies rate the credit of a central government, they don’t rate the riskiness of its debt losing value. They only rate the risk of default on the debt, which gives the misimpression that all higher-rated debt is a safe storehold of value. Said differently, because central banks can bail out central governments, the riskiness of central governments’ debts are hidden. Creditors would be better served if the rating agencies rated the riskiness of the debt losing value through both default and devaluation. After all, these bonds are supposed to be storeholds of wealth and should be rated as such. As you will see in this study, that is how I look at bonds. For countries with debts denominated in their own currencies (i.e., in a currency they can print), I rate central governments’ debts separately from their central banks to show how risky they are, and I rate the risks of central banks’ debts by considering the risk of the devaluation of money to be as, if not more, probable than a default on government debt.

Default or devaluation, I don’t care. What I care about is losing my storehold of wealth, which inevitably will happen one way or another.

Following the Debt Cycle’s Progression

The main difference between a short-term debt cycle and a long-term (big) debt cycle has to do with the central bank’s ability to turn them around. For the short-term debt cycle, its contraction phase can be reversed with a heavy dose of money and credit that brings the economy up from a depressed disinflationary state because the economy has the capacity to produce another phase of noninflationary growth. But the long-term debt cycle’s contraction phase cannot be reversed by producing more money and credit because existing levels of debt growth and debt assets are unsustainable and holders of debt assets want to get out of them because they believe that, one way or another, they will be poor storeholds of wealth.

Think of the Big Debt Cycle’s progression like the progression of a disease or a life cycle through stages that exhibit different symptoms. By identifying these symptoms one can identify approximately where the cycle is in its progression with some expectations of how it is likely to progress from there. Described most simply, the Big Debt Cycle moves from sound/hard money and credit to increasingly loose money and credit to a debt bust that leads to a return to sound/hard money and credit brought about by necessity. More specifically, at first there is heathy borrowing by the private sector that can be paid back; then the private sector overborrows, has losses, and has problems paying it back; then the government sector tries to help, overborrows, has losses, and has problems paying it back; then the central bank tries to help by “printing money” and buying the government debt, and has problems paying it back, which leads it to monetize a lot more debt if it can (i.e., if the debt is denominated in the currency that it can print). Though not all cases progress in exactly the same way, most cases progress through the following five stages:

1)      The Sound Money Stage: When net debt levels are low, money is sound, the country is competitive, and debt growth fuels productivity growth, which creates incomes that are more than enough to pay back the debts. This leads to increases in financial wealth and confidence.

• Credit is the promise to deliver money. Unlike credit which requires a payment of money at a later date, money settles transactions—i.e., if money is given the transaction is complete, whereas if credit is given money is owed. It’s easy to create credit. Anyone can create credit but not anyone can create money. For example, I can create credit by accepting your promise to pay me money even if you don’t have the money. As a result, credit easily grows so there is much more credit than there is money. The most effective money is both a medium of exchange and a storehold of wealth that is widely accepted around the world. At the early stage of the Big Debt Cycle money is “hard,” which means that it is a medium of exchange that is also a storehold of wealth that can’t easily be increased in supply, such as gold, sterling silver, and Bitcoin. Cryptocurrency like Bitcoin is now emerging as an accepted hard currency because it is a currency that is widely accepted around the world and is limited in supply. The biggest, most common risk to money becoming an ineffective storehold of wealth is the risk that a lot of it will be created. Imagine having the ability to create money; who wouldn’t be tempted to do a lot of that? Those who can always are. That creates the Big Debt Cycle. In the early part of the Big Debt Cycle, a) money is typically hard—e.g., gold—and the paper money that circulates like money is convertible into the “hard money” at a fixed price and b) there isn’t a lot of paper money and debt (which is the promise to pay money) outstanding. The Big Debt Cycle consists of the building up of a) “paper money” and debt assets/liabilities relative to b) “hard money” and real assets (e.g., goods and services) and relative to the income that is required to service the debt. Basically, the Big Debt Cycle works like a Ponzi scheme or musical chairs with investors holding an increasing amount of debt assets in the belief that they can convert them into money that will have buying power to get real things, yet as the amount of the debt assets that are held up by that faith increases relative to the real things, that conversion becomes more obviously impossible until that is realized and the process of selling the debt to get the hard money and real assets begins.

• At the early stage of the debt cycle, private and government debt and debt service ratios are 1) low relative to incomes and/or 2) low relative to liquid assets. For example, government debt and debt service are low relative to government tax revenue and/or low relative to government liquid assets (e.g., reserves and other savings such as sovereign wealth assets) that can easily be converted into money. For example, when the Big Debt Cycle that we are in began in 1944, the ratios of a) US government debt and b) US money supply divided by the amount of gold the US government had were equal to a) 7x and b) 1.3x respectively, whereas now these ratios are a) 37x and b) 6x respectively.

• During this early stage in the cycle, debt levels, debt growth, economic growth, and inflation are neither too hot nor too cold and finances are both sound.

• At this stage in the cycle, “risky assets” are relatively inexpensive relative to “safe” assets. That is because the memories of the prior period in which there was great damage done affects psychology and pricing. For example, in the late 1940s and early 1950s stock earning’s yields were roughly 4x that of bond yields.

• During this stage, there is a healthy economy and good investment returns that lead to the next stage.

2)      The Debt Bubble Stage: When debt and investment growth are greater than can be serviced from the incomes being produced.

• In this stage, money is readily available and cheap, there is a debt-financed economic expansion and an economic boom. Demands for and prices of goods, services, and investment assets are driven up by a lot of debt-financed buying, sentiment is very bullish, and, by most conventional measures, the market is overpriced.

• In this stage, there are typically amazing new inventions that are truly transformative that investors invest in without an ability or care to assess whether the present value of their future cash flows will be greater or less than their costs.

• This dynamic eventually produces a bubble that is reflected in the rates of debt and debt service growth to finance speculation being greater than the income growth rates that are needed to service the debts. In this stage, markets and economies seem great, most everyone believes that they will get better, they are financed by a lot of borrowing, and “wealth” is created out of nothing. By wealth being created out of nothing, I mean that there is greater imagined wealth rather than actual existing wealth. For example, bubble periods are identifiable by extensive periods (e.g., three years) of debt growth that is significantly faster than income growth, high asset prices relative to traditional measures of the present values of likely future cash flows, and many other factors that I measure in my bubble indicator. (You can find the indicator

  here

  .) A contemporary example is the unicorn that is valued at over $1 billion that has made the owner a “billionaire” on paper but has only raised $50 million in capital because speculative venture capitalists put in the money to get option-like chips in case it does well. Bubbles can go on a while before the top is made. However, they inevitably lead to the next stage.

3)      The Top Stage: When the bubble pops and there is a credit/debt/market/economic contraction.

• The popping of the bubble occurs due to a combination of a tightening of money and the prior rate of debt growth being unsustainable. It is just that simple.

• When the bubble is popped, a self-reinforcing contraction begins so the debt problems spread very quickly, like an aggressive cancer, so it is very important for policy makers to deal with it quickly, either to reverse it or to guide the deleveraging to its conclusion. In most cases, the debt contraction can be temporarily reversed by giving the system a heavy dose of what caused the debt problem—i.e., by creating more credit and debt. That continues until it can’t continue anymore, at which time a big deleveraging occurs.

4)      The Deleveraging Stage: When there is a painful bringing down of debt and debt service levels to be in line with income levels so that the debt levels are sustainable.

• At the beginning of this stage in the Big Debt Cycle, the first cracks typically spread from the private sector to the central government and then to the central bank. Net selling of debt assets, especially net selling of government debt assets, is a big red flag. When that happens conditions will deteriorate quickly unless managed very well and very quickly by central governments and central banks. That selling takes the form of runs on banks. By “runs on banks” I mean the turning in of debt assets to get real money, which lenders like banks don’t have enough of. When debt problems become apparent, the holders of the debt assets sell their debt assets, which drives interest rates on the debt up. This makes the debt more difficult to service, hence more risky, which drives interest rates higher.

• The selling of the government’s debt leads to a) a free-market-driven tightening of money and credit, which leads to b) a weakening of the economy, c) downward pressure on the currency, and d) declining reserves as the central bank attempts to defend the currency. Classically, these runs accelerate and feed on themselves as holders of debt assets see that, one way or another (through default or through the devaluation of their money), they will lose the buying power that they had believed was stored in these debt assets, causing great shifts in market values and wealth until debts are defaulted on, restructured, and/or monetized. Because this tightening proves too harmful for the economy, the central bank eventually simultaneously eases credit and allows a devaluation of the currency. The devaluation of money can itself be the reason to sell the debt asset because it becomes a poor storehold of wealth. So, whether there is a tightening of money that leads to debt defaults and a bad economy or an easing of money that produces a devaluation of money and debt assets, it is not good for the debt asset. This dynamic creates what is called a death spiral because it is a self-reinforcing, debt-contraction dynamic in which the rising interest rates cause problems that creditors see, leading them to sell the debt assets, which leads to even higher interest rates or the need to print more money, which devalues the money and leads to even more selling of the debt assets and the currency and so on until the spiral runs its course. When this happens to government debt, the realization that too much debt is the problem naturally leads to the inclination to cut spending and borrowing. However, because one person’s spending is another’s income, cutting spending at such times typically only contributes to increases in debt-to-income ratios. That is typically when policies are shifted to a mix of debt restructurings and debt monetizations with the mix chosen primarily dependent on how much of the debt is denominated in the country’s currency. This defaulting on, restructuring of, and/or monetizing debt reduces the debt burdens relative to incomes until a new equilibrium is reached. The movement to a stable equilibrium typically takes place via a few painful adjustment spasms because borderline financial soundness is achieved before secure financial soundness.

• Classically, the deleveraging process progresses as follows. Early in this recession/depression phase, central banks bring interest rates down and make credit more available. However, when a) debts are large and a debt contraction is underway, b) interest rates can’t be lowered any more (i.e., when they fall around 0%), c) there is not enough demand for government debt, and d) the monetary easing is not enough to offset the self-reinforcing depressionary pressures, the central bank is forced to switch to new “tools” to stimulate the economy. Classically, to stimulate the economy the central bank must lower interest rates to below nominal economic growth rates, inflation rates, and bond rates, but that is difficult to do when they approach 0%. At the same time, the central government is typically getting itself into a lot more debt because tax revenues are down and spending is up to support the private sector, yet there is not enough private sector demand to buy that debt. The central government experiences a debt squeeze in which the free-market demand for its debt falls short of the supply of it. If there is net selling of the debt, that creates a much worse problem.

• Often in this deleveraging stage of the cycle there is a “pushing on a string,” a phrase coined by policy makers in the 1930s. It occurs late in the long-term debt cycle when central bankers struggle to convert their stimulative policies into increased spending because savers, investors, and businesses fear borrowing and spending and/or there is deflation, so the risk-free interest that they are getting is relatively attractive to them. At such times, it is difficult to get people to stop saving in “cash” even when interest rates go to 0% (or even below 0%). This phase is characterized by the economy entering a deflationary, weak, or negative growth period as people and investors hoard low-risk, typically government-guaranteed cash.

• At this stage, central banks must choose between keeping money “hard,” which will lead debtors to default on their debts, which will lead to deflationary depressions, or making money “soft” by printing a lot of it, which will devalue both it and the debt. Because paying off debt with hard money causes such severe market and economic downturns, when faced with this choice central banks always eventually choose to print and devalue money. Of course, each country’s central bank can only print that country’s money, which brings me to my next big point.

• At this stage, if it has the ability to “print money,” the central bank creates a substantial amount of money and credit and throws it aggressively at the markets. It typically buys government debt and private sector debt of systemically important entities that are at risk of defaulting (in order to make up for the private sector’s inadequate demand for debt and to keep interest rates artificially low), and it sometimes buys equities and creates incentives for people to buy goods, services, and financial assets. At this stage, it is also typically desirable to devalue the currency because that is stimulative to the economy and raises inflation rates thus negating the deflationary pressures. If the currency is linked to gold, silver, or something else, that link is typically broken and there is a move to a fiat monetary system. If the currency isn’t linked—i.e., if the currency is already a fiat currency—devaluing it relative to other storeholds of wealth and other currencies is helpful. In some cases, the central bank’s moves can drive nominal interest rates higher, either because the central bank tightens monetary policy to fight inflation or because it doesn’t tighten money to fight inflation and holders of the debt don’t want to buy the newly issued government debt and/or they want to sell it because it doesn’t provide an adequate return. It is important to watch real and nominal interest rates and the supply and demand for debt to understand what is happening. At such times, extraordinary policies to get money like imposing extraordinary taxes and capital controls become common.

• This deleveraging stage is typically a painful time when debt burdens are reduced by defaults, restructurings, and/or devaluations. This is when an aggressive mix of debt restructurings and debt monetizations inevitably takes place to reduce the debt and debt service burdens relative to incomes. In a typical deleveraging the debt-to-income ratio has the be lowered by roughly 50%, give or take about 20%. It can be done well or poorly. When it is done well, which I call a “beautiful deleveraging,” central governments and central banks simultaneously do both debt restructurings and monetary stimulations in a balanced way. The restructurings reduce debt burdens and are deflationary while the monetary stimulations also reduce debt burdens (by providing money and credit to make it easier to buy debt) but are inflationary and stimulative to the economy so, if they get the balance right, positive growth occurs with falling debt burdens and acceptable inflation. Whether done well or poorly, this is the stage of the Big Debt Cycle that reduces a lot of the debt burden and establishes the bottom that can be built on to begin the next Big Debt Cycle.

5)      The Big Debt Crisis Recedes: When a new equilibrium is reached, and a new cycle begins.

• In order to have a viable money/credit/debt system, it is imperative that a) money/debt is sound enough to be a viable storehold of wealth, b) debt and debt service burdens are in line with the incomes to service them so that debt growth is sustainable, c) creditors and debtors both believe that those things will exist, and d) the availability of money and credit and real interest rates begin to fall in line with that which is needed by both lender-creditors and borrower-debtors. This late phase of the Big Cycle is when there is a movement to those things happening. It requires both psychological and fundamental adjustments. After a big deleveraging, it is typically difficult to convince lender-creditors to lend because the devaluations/restructurings they experienced in the deleveraging make them risk-averse, so it is imperative that the central government and the central bank take credibility-restoring actions. These generally involve bringing their finances in order by a) the central government earning more money than it spends and/or b) the central bank making money hard again by offering high real yields, raising reserves, and/or linking the currency to something hard like gold or a strong currency. Typically, in this stage, interest rates need to be relatively high in relation to inflation rates and more than high enough to compensate for currency weakness, so it pays to be a lender and is costly to be a borrower. This stage of the cycle can be very attractive for lender-creditors.

The stage that the Big Debt Cycle is in is also reflected in the types of monetary policies being used. As the Big Debt Cycle progresses, central banks have to change how they run monetary policy in order to keep the credit/debt/economic expansion going, so by observing what type of monetary policy they are using, one can surmise about what stage the Big Debt Cycle is in. The phases in monetary policy and the conditions that lead to them are as follows:[4]

Phase 1: A Linked (i.e., Hard) Monetary System (MP1). This is the type of monetary policy that existed from 1944 until 1971. This type of monetary policy ends when the debt bubble bursts, and there is the previously described “run on the bank” dynamic, which is a run from credit assets to the hard money, and the limited amount of hard money causes massive defaults. This creates a compelling desire to print money rather than leave the supply of it limited by the supply of the gold or hard money that exists to be exchanged at the promised price.

Phase 2: A Fiat Money, Interest-Rate-Driven Monetary Policy (MP2). During this phase, interest rates, bank reserves, and capital requirements are also controllers of the amounts of credit/debt growth. This fiat monetary policy phase both allows more flexibility and provides less assurance that money printing won’t be so large that it will devalue money and debt assets. The US was in this phase from 1971 until 2008. It ends when interest rate changes no longer work (e.g., interest rates hit 0% and there is a need to ease monetary policy) and/or the private market demand for the debt being created falls short of the supply being sold so that, if the central bank did not print the money and buy the debt, money and credit would be tighter and interest rates would be higher than desired.

Phase 3: A Fiat Monetary System with Debt Monetization (MP3). This type of monetary policy is implemented by the central bank using its ability to create money and credit to buy investment assets. It is the go-to alternative when interest rates can no longer be lowered and when private market demand for debt assets (mostly bonds and mortgages though it can also include other financial assets like equities) is not large enough to buy the supply at an acceptable interest rate. It is good for financial asset prices, so it tends to benefit disproportionally those who have financial assets. It won’t effectively deliver money into the hands of those who are financially most stressed, and it won’t be very targeted. The US was in this phase from 2008 until 2020.

Phase 4: A Fiat Money System with Coordinated Big Fiscal Deficit and Big Debt Monetization Policy (MP4). This type of monetary policy is used when, in order to make the system work well, central government fiscal policy and central bank monetary policy have to be coordinated in order to get money and credit into the hands of people and entities that need it most. While creating money and credit typically temporarily alleviates the debt problem, it does not rectify the problem.

Phase 5: A Big Deleveraging (MP5). This is when there must be a big reduction in debt and debt service payments through a debt restructuring and/or a debt monetization. When managed in the best possible way—what I call a beautiful deleveraging—the deflationary ways of reducing debt burdens (e.g., through debt restructurings) are balanced with the inflationary ways of reducing debt burdens (e.g., by monetizing them), so that the deleveraging occurs without having unacceptable amounts of either deflation or inflation. The Big Debt Cycle sequence to keep in mind is: first the private sector overborrows, has losses, and has problems paying it back (i.e., a debt crisis); then, to help, the government overborrows, has losses, and has problems paying it back; then, to help out, the central bank buys the government debt and takes losses. To fund those purchases and to fund other debtors in trouble (because it is the “lender of last resort”), the central bank prints a lot of money and buys a lot of debt. Then, at its worst, the central bank loses a lot of money on the debt it bought.

• While it is said that modern central bank “prints” money to buy the debt, the central bank doesn’t literally “print money.” Instead, it borrows money (reserves) from commercial banks that it pays a very short-term interest rate on. At its most extreme, the central bank can lose money because the interest earnings it gets on the debt it bought are less than the interest that it has to pay out on the money it borrowed, so when these amounts become large it can find itself in a self-reinforcing spiral of having to buy debt, which leads it to have losses and negative cash flows which leads it to need to print more money to service its debt and to need to buy more debt which ends up having more losses which requires it to do more of the same. This is the “death spiral” I mentioned earlier. When done in large amounts, the “printing” devalues the money and creates inflationary recessions or depressions. If interest rates rise, the central bank loses money on its bond holdings because the interest rate that it has to pay on its liabilities is greater than the interest rate it receives on the debt assets it bought. This is notable but not a big red flag until the central bank has a very large negative net worth and is forced to “print” more money to cover the negative cash flow that it experiences due to less money coming in on its assets than has to go out to service its liabilities. That is what I mean when I say the central bank goes broke: while the central bank doesn’t default on its debts, it can’t make its debt service payments without printing money.

• Eventually the debt restructurings and debt monetizations reduce the size of the debts relative to incomes and the debt cycle runs its course.

Phase 6: The Return to Hard Money (MP6). In this phase the central government takes actions to restore the soundness of its money and credit/debt. This type of monetary policy occurs after the debt has been written down through debt defaults/restructurings and debt monetizations so the debt levels relative to the incomes and amounts of money that are available to service the debts can be brought back into alignment. As previously described, it comes after those who held the debt assets were burned by the defaults and/or inflationary periods, so confidence in holding debt assets has to be rebuilt. At this stage, countries typically go back to MP1 (i.e., a hard-asset-backing monetary policy) or MP2 (an interest rate/money supply-targeted monetary policy) that is beneficial to lender-creditors via high real interest rates.

For great countries with great empires, the end of the Big Debt Cycle has meant the end of their prominence.

A Few Concluding Observations

• It pays to build up savings in the good times so there are savings to draw on in the bad times. There are costs to having too much savings as well as too little savings, and no one gets the balance exactly right.

• Big debt crises are inevitable. Throughout history only a very few well-disciplined countries have avoided them. That is because lending is never done perfectly relative to the incomes that are needed to service it. And it is often done badly because people always want more credit and that turns into debt. Debt levels get beyond that which is sustainable which leads to the need to bring the debt burdens down which typically leads to a mixture of debt defaults/restructurings and the creating of money and credit, leading a debt crisis to occur. And people’s psychology reinforces the cycle: the bubble period makes people more optimistic causing them to borrow more, and the bust causes people to be more pessimistic causing them to cut spending. Even though this progression has happened many times in history, most policy makers and investors think their current circumstances and monetary system won’t change. The change is unthinkable—and then it happens suddenly.

• The best way to anticipate a debt crisis happening is not by focusing on a single influence or number like debt as a percent of GDP; it is by understanding and focusing on a number of interrelated dynamics that we will get into, especially in the next two chapters.

• If debts are denominated in a country’s own currency, its central bank can and will “print” the money to alleviate the debt crisis. This allows them to manage it better than if they couldn’t print the money, but of course it also reduces the value of the money. If the debt is not denominated in currencies that their central banks can print, then they will have debt defaults and deflationary depressions measured in the currency that they owe and can’t print.

• All debt crises, even big ones, can be managed well by economic policy makers restructuring and monetizing them so that the deflationary ways of reducing the debt burdens (i.e., writing off and restructuring debt) and the inflationary ways of reducing debt burdens (creating money and credit and giving it to the debtors to make it easier for them to service their debts) balance each other. The key is to spread the paying back over time. For example, if the debt-to-income ratio needs to fall by about 50% to make it sustainable, a debt restructuring that spreads it out to be at a rate of 3% or 4% per year would be much less traumatic than one that is about 50% in one year.

• Debt crises provide great risks and opportunities that have been shown to both destroy empires and provide great investment opportunities for investors if they understand how they work and have good principles for navigating them well.

• If you try to focus on debt cycles precisely or focus your attention on the short term you won’t see them. It’s like comparing two snowflakes and missing that they are pretty much the same because they’re not exactly the same.

That’s it in a nutshell.

In the rest of this study I will get into the mechanics in greater depth, show the actual archetypical sequences that have played out over 35 cases, look at how the Big Debt Cycle and Big Cycle that includes the other big cycles  (for instance, cycles of internal and external order) that started in 1944 and that we are currently in the late stages of have transpired relative to this template, and briefly look at the Chinese and Japanese Big Cycles and a number of other cases. The Japanese case is interesting because Japan is further along in its Big Debt Cycle. Notably its large debt and debt monetizations have led to the depreciation of its currency and debt, which led holders of its bonds to have losses of 45% relative to holding US dollar debt since 2013 and losses of 60% relative to holding gold since 2013. In the final chapters, I will share how I am processing the US today relative to this template, how the US could reduce the risk of an acute debt crisis, and how I read the Five Big Forces today.