I am not an economist, but I asked myself a logical question:
If all the countries of the world—rich and poor—are in debt, then who is the creditor? Does not every debt have a lender?
The answer is that there is no secret person or hidden entity that owns the world and lends to everyone, as conspiracy theories suggest.
The real creditors are a vast mix of entities: central banks (the U.S. Federal Reserve, the European Central Bank, the Bank of Japan, the People’s Bank of China…), which are the largest holders of government debt in the world. For example, the U.S. Federal Reserve currently holds about $6–7 trillion in U.S. Treasury bonds.
There are also commercial banks and financial institutions. When governments, companies, or individuals borrow, banks create money out of nothing in exchange for interest—this is called “credit money.”
There are pension funds, holders of government bonds, corporations, individuals, and wealthy investors. In China, Japan, and Europe, people buy massive amounts of government bonds. Governments themselves hold the debts of other governments: China owns over a trillion dollars in U.S. Treasuries, and Japan owns huge amounts as well.
There are also sovereign wealth funds like Norway’s (about $1.7 trillion), Abu Dhabi’s, or Saudi Arabia’s.
In one sentence, the conclusion is:
“The largest creditor in the world is the banking system itself (especially central banks), and the money we use to pay debts is itself other debt created out of thin air in exchange for interest.”
So there is no single person collecting all the interest. The system is designed so that everyone remains permanently in debt. Money is printed without gold backing, unlike in the early banking system, which is why inflation continues year after year.
I then asked myself: Does this not mean rising inflation and prices? Does it not lead to an eventual explosion?
I asked artificial intelligence, and it answered that the global system can collapse—but it has not yet, for specific reasons explained in the following questions and answers.
1. Does this system cause permanent inflation?
Yes—by necessity. To pay interest on old debt, new debt must be created. New debt = more money. More money (without matching growth in production) = loss of purchasing power = inflation. So inflation is not an accident; it is structurally required.
That is why central banks target 2–3% inflation and call it “healthy.”
2. Will this lead to collapse or an “explosion”?
Possibly—but not inevitably in the short term. There are three main scenarios:
Scenario 1: Sudden collapse (least likely now)
This could happen if the world suddenly loses confidence in the dollar, euro, or government bonds. Countries and investors would sell bonds en masse, governments would lose funding, and cascading defaults would follow. This almost happened in 2008 and was stopped by printing trillions of dollars.
Scenario 2: Chronic inflation turning into runaway inflation (most likely gradually)
What we see now—7–10% inflation in many countries—is not temporary. If money printing continues to fund deficits and interest, inflation could reach 15–20–30% annually, like Turkey or Argentina. Then currencies collapse slowly and people rush to gold, crypto, or foreign currencies.
Scenario 3: “Japanification” (already happening)
Debt rises to 300% of GDP, but the central bank buys all new debt. Interest rates stay at zero or negative. Inflation is very low. Growth is extremely slow or stagnant for decades—like Japan for the last 30 years, and now Europe and the U.S.
So when will it blow up?
Probably not in one dramatic strike, but through slow erosion—like snow piling on a mountain until the last flake triggers an avalanche.
Near warning signs: rising interest rates despite money printing, loss of confidence in a major currency, a major war, or an energy crisis.
Final conclusion:
Yes, the system requires continuous inflation, and the longer it continues, the greater the chance of collapse. But the collapse is not necessarily tomorrow—it may take 10, 20, or 30 more years… or happen next week if confidence suddenly vanishes.
The real question is: Who will protect their savings before inflation melts them or a currency collapses?
(The traditional historical answer: gold, silver, land, or real assets.)
—based on my own analytical experience, despite not being a specialist.
