https://www.cnn.com/2024/07/02/economy/global-debt-crisis/index.html
In: Economics
Left hands owe right hands. Peters owe Pauls.
People take wages and drop them in banks or want to save for the longer term or invest for better returns.
Banks take smaller short term deposits, bundle them and make longer term loans to people so they can borrow to buy cars or houses, etc. Or, the banks lend to people’s businesses, so businesses can expand, or build factories and such.
Those businesses that took the bank loans, the banks bundled or “bond”ed these loans, and sold them to people as saving bonds, paying savers higher interest than they offered on shorter term deposits.
Sometimes the businesses offered to share their ownership… to the public, selling stock equity ownership, created a stock market.
Tldr. All the world’s debt is the circle of life of money – those who have it, lend it to those who don’t
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