Core Viewpoint - The global debt system is complex and fragile, with countries deeply in debt, raising the question of who is lending money when everyone is in debt. The system is at risk of unprecedented collapse due to accumulated risks such as high global debt, rising interest rates, political polarization, and climate change [1][2][18]. Group 1: Global Debt Dynamics - Every major country is in significant debt, with the U.S. debt reaching $38 trillion and Japan's debt at 230% of its GDP. Despite this, the global economy continues to function, leading to the question of who is providing the loans [4][6]. - The largest creditors of the U.S. government are internal entities, including the Federal Reserve and various government trust funds, with approximately $13 trillion owed to itself [6][7]. - Citizens in wealthy countries are both borrowers and lenders, as their savings and pensions are invested in government bonds, making them significant stakeholders in the debt system [5][8]. Group 2: Mechanisms of Debt and Inequality - Quantitative Easing (QE) allows central banks to create money digitally to purchase government bonds, which has led to rising asset prices and increased wealth inequality, benefiting the already wealthy disproportionately [10][12]. - The U.S. is projected to pay $1 trillion in interest in the fiscal year 2025, highlighting the growing burden of debt servicing, which is expected to consume a significant portion of the federal budget [13][14]. Group 3: Risks and Future Outlook - The global debt has reached $111 trillion, accounting for 95% of global GDP, with a notable increase of $8 trillion in just one year. This situation is unsustainable, and adjustments will be necessary, though it is uncertain whether these will be gradual or crisis-driven [9][19]. - The system relies on confidence in government repayment capabilities and the stability of currency value. A loss of confidence could trigger a crisis similar to past financial collapses [17][18]. - The interconnected nature of global debt means that all countries are collectively lending to each other, creating a vast network of obligations that could lead to instability if not managed properly [19][20].