Sky News host Cory Bernardi says the entire world is “awash in a sea of debt” which is close to a “perpetual borrowing binge”, but the hard truth is that all debts have to be repaid eventually.
“Despite the trials of the past year, life has been pretty good in Australia over recent decades,” Mr Bernardi said.
“Interest rates are at 5,000-year lows, I’m betting they’re not going to go that much lower – it allows people to borrow very cheaply, which means they will accept lower returns, which in turn, props up asset prices”.
“Government’s around the world are also printing money which eventually has to find a home somewhere. It’s no good leaving it in the bank because there is no real return”.
Mr Bernardi said the world’s debts will “have to repaid eventually”, and they are either paid “by the borrower, defaulted on – which means the lender is actually paying, or it’s eroded by inflation”.
“And that’s what governments are currently desperate to do: create inflation.”
Mr Bernardi spoke with economist Harry Dent about the issue.
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