Comments by "Curious Crow" (@CuriousCrow-mp4cx) on "The national debt is something to be celebrated" video.

Because they can't use their currency to buy US Dollars, and they have no liquid assets to sell for US Dollars. One thing people don't realise is that having access to US Dollars is essential as it is the currency that all commodities are denominated in. So you have to pay in US dollars. If you don't, you have to pay more to cover the cost of exchanging your currency for USD. In this sense, the US dollar is "International Money" as it is accepted everywhere at its nominal value. This has been the case since the end of World War II. In the decade after World War II, the US had capital controls, where US Dollars leaving the country was strictly limited. Europe including the UK found it difficult as the only USD in Europe was the balances left from the Marshall Aid programme, and these weren't enough for a continent rebuilding after the war. This meant difficulties in buying food, energy, and goods. And the US arguably used their control of the supply of USD to drive forward it's foreign policy. The UK and France would run into that problem when they conspired with Israel to invade Suez, which the Egyptians had nationalised. The US used the shortage to apply pressure on UK Prime Minister Anthony Eden and France to quit Suez, or face a Sterling crisis. He had to agree, and it cost him his job. Accordingly, in Europe including London, a trade built up between the private banks holding deposits of USD and countries and multinational companies needing USD to buy commodities. It was so profitable, that it became the basis of global money creation being outsourced to Banks rather than governments. But that's another story for another time. Hope this helps.
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If you can find the figures, check out how much is actually paid in interest. You'll find that the amount is marginal, effectively being an Accounting entry, because they are credited to accounts where the assets are not realised, but are reinvested. Most premium bonds are not cashed out until maturity. Therefore actuaries can model that, and the government creates reserves for that from revenues.
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Lol. It's you who doesn't understand finance. Thinking like yours explains why most mainstream economists didn't realise 2008 was coming. I suggest you actually look at how HM Debt Management Office and the UK Government Actuaries actually quite successfully use Liability-driven Management Techniques to create reserves and invest those to meet future liabilities. That is Finance, not Economics, and there are few economists who actually understand the difference. And Richard is one of them. Finance is actually centuries older than Economics as a discipline, because money existed long before Adam Smith and David Ricardo. Get a grip.
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One person savings (assets) is another person's debt (liabilities). Google it to see it in action.
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I think you are mistaken in your understanding of what is being said. Premium bonds are not sovereign debt because they can not be traded. Premium bonds are a purely retail product sold by the UK government to its citizens. It is in effect a lottery, where you can get your stake back. The return on Premium Bonds is neglibile, because it depends on you winning a prize in the monthly draw. These bonds cannot be traded, in contrast to sovereign debt instruments that frequently are as a proxy for cash. The fact that you don't know the difference strongly suggests you didn't research the subject before commenting. It's not a good look. Just a thought.
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Firstly, who owes who exactly? And how is debt actually managed? You need to understand that liability-driven debt management is used to manage debt, and not all debt is bad. You buy a house you are in debt, but at least you have a roof over your head. And because of asset price inflation the value of the house increases beating cash saved in the bank is that good debt or bad debt? And if its bad, who for exactly? Likewise, Government debt is not a problem if it is invested in assets that generate a return. So then, what assets generate returns for government? And if they are generating returns for governments, then before that they must be generating returns for tax payers, because government overwhelmingly rely on tax revenues. So think about it carefully.
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It is because people don't understand the reality. Finance has been around far longer than economics, yet the public understanding of both is limited, and that is to their detriment. Why? They are like cattle being prepped for slaughter, since most Western economies bought into the theory that financialising everything was a good idea.
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Then what you are really saying is that Brexit which devalued the pound, moved the UK credit rating down, and stagnated the UK economy, also increased the interest rate the UK pays to those who hold its sovereign debt, even when Liz Truss' mini budget created a "moron premium", yes? But one should not confuse the map with the territory. Premium Bonds are liabilities for the UK government, but don't pay interest. Instead of interest, holders are entered into a monthly draw where they can win prizes... For that privilege, they can get back their stake. It's a government lottery that gives the Treasury a interest free loan. That saving pays for the prizes and the government saves money. Premium bonds cannot be traded or exchanged. Sovereign Debt instruments sold to investors are a different creature altogether. They can be traded or exchanged, and they except for the shortest durations pay interest to maturity as the coupon. So UK Premium Bonds and UK Gilts are chalk and cheese.
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The name isnt stupid. It's that the majority of people don't understand Double Entry Bookeeping, which is a written representation of a financial transaction between two entities. Money you receive that you can use goes into your account as a debit, and the person or thing paying you that money in their books it appears as a credit going to you. Briefly, Debit entries are assets - value you own, and Credit entries are liabilities - value that belongs to someone else that has or must paid in the future. Have more assets than liabilities = happiness: you're "in the black". Have more liabilities than assets = sadness; "you're in the red." Being in the "red" or "black" comes from the tradition of writing the final balance of assets vs liabilities held in black ink if assets exceed liabilities, or red if liabilities exceed assets. It's that simple. For centuries people who owed money were called debtors because their debts were assets owned by the people the debtor owed money to. It reflects the imbalance of power between a debtor and their creditors. From indentured labour to prison history speaks to the debtor not being in control of their life. So, learning double entry Bookeeping should be a skill taught in school. One should be able to track ones financial position at all times. But in a financial system that is overwhelmingly reliant on debt as wealth, such skills are not taught, and that is dangerous. Personal Finance skills are ill served by a system that needs more debt to grow economically.
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