Hennessy's View

Domine, non sum dignus

A Dangerous Misunderstanding of Debt

Debt is not a guarantee of future payments in full. Rather, it is a risk that creditors take, in hopes of maybe being paid tomorrow. The key word there is “risk.” If you’re willing to take the risk, you’ll get a premium — in the form of interest. But the downside of that risk is that you lose your money. And Greece just called Germany’s bluff. Jim Edwards nailed a major problem with modern finance. Read more →