What is Beautiful Deleveraging?

less than 1m read

·Nov 8, 2024

A number of people asked me, "What is a beautiful deleveraging?" Well, first let me start with what is the deleveraging. Sometimes there's too much debt burden, which also means that somebody's holding too many debt assets and they're not going to get paid.

So, what is necessary is to bring those things down in relation to incomes, and so that's a deleveraging. What is a beautifully leveraging? A beautiful deleveraging is when that happens in a spread-out way over a period of time and in a balanced way.

Now, spread out, let me give you an example. If you can't pay all your debts, maybe you can pay 70 or 80 percent of those debts, and you spread that over a period of time. For those who are not getting those debt payments, then that shifts their burden over a period of time.

There are two ways of bringing down those debts: paying less or having the Central Bank print money, which produces some inflation pressures. When they do that, if they print a little bit of money and then you have the restructuring, they can balance each other and make it a smoother and less disruptive. That is a beautiful deleveraging.

The feeling of wanting to leave everything behind...

Marmots of Olympic National Park | America's National Parks

View All

The Real-Life MacGyver in Nat Geo’s Basement | Podcast | Overheard at National Geographic

I want you to imagine a photograph. Okay, we’re way up north in the Canadian Arctic at a place called Ellsmere Island. This is a land where packs of white Arctic wolves prey on oxen. Okay, picture big shaggy buffalo with thick curling horns. All right, ou…

Stock Splits are Secretly Pumping the Stock Market

Stock splits, they’re supposed to be totally irrelevant, right? They don’t change anything about the company, they don’t change anything about the valuation, they don’t change anything about the investing thesis. Well, bizarrely, stock splits are somehow …

The People Behind the Photography | Podcast | Overheard at National Geographic

Foreign [Music] To on my first visit to Indonesia in 1998. That’s John Stanmeier, a photographer at National Geographic. That year he was covering mass riots in the country triggered by economic collapse when he met someone who would change his life. I w…

Open primaries, closed primaries, and blanket primaries | US government and civics | Khan Academy

Let’s talk about primary elections, which are often known as primaries. One way to think about them is that they’re just preliminary elections used to get down to a fewer number of candidates. A very simple example would be, let’s say there is a congressi…

Turning $1M to $1B+: An Investing Masterclass from the Indian Warren Buffett (Mohnish Pabrai)

The opportunities that would truly make us wealthy are not going to come around every week. They’ll come around every so often, and they come around at unpredictable times. But when they do come around, and when you do recognize it, you need to act very s…

The Surest Way out of Misery | Arthur Schopenhauer

Arthur Schopenhauer is infamous for his pessimistic outlook on life. He saw life on Earth as a cosmic disaster and felt that the universe would have been a better place without it. Human existence, as a whole, he compared to a prison sentence. And he also…

What is Beautiful Deleveraging?

More Articles