Debt is just a tool for creating money

Debt essentially creates money. The whole point behind loans and using assets as collateral is so wealthy folks can access cash without having to sell their assets unless they hit a crazy high price. When things like gold, silver, Bitcoin, or real estate reach their peak, the rich will offload these assets to those who are less wealthy, including the middle class and those aspiring to be rich. But until then, they just borrow against what they own. When the timing is right, and their debt ratios and margins are maxed out, that's when they cash in, just like Trump does with his bank loans. The fact that banks and financial institutions are scooping up assets like gold right now indicates they’re looking for collateral. This suggests we’re headed for another round of money printing, with gold, Bitcoin, silver, and other assets serving as collateral to generate even more cash. The key takeaway about debt is that it helps build credit history, making it easier to secure larger loans. At the same time, it can inflate the prices of the assets you hold. The smart players, like Trump, won’t sell unless prices are sky-high, and they won't buy unless the prices are rock-bottom.

Debt financing can be good based on the amount of interest paid on the principal amount,  this should be the first thing a lender should check while considering to take loans. If you use your assets as collateral and the interest is high, you end up paying more if your investment turn-out becomes low due to unforseen economic situation, like increasing tax on assets like real estate and other digital assets.

Well, it's not that simple. Managing debts is a challenging thing to do, and not everyone can do that. Those who are running big businesses and own large companies take loans to invest either in their existing businesses to expand them or start new businesses, and they do this because they know that the businesses are going to make them more money than they have borrowed, and then they repay the loans and build credit so that they can get higher loans next time to do bigger things with it, but it's not a game everyone can play and win, so many people go bankrupt because of mismanagement. You can only do this efficiently if you are smart and can manage debts smartly without getting yourself and your businesses in trouble, because if you waste the money and don't make more money with it, you will still need to repay the debts, and for that, you will probably need to sell something you own, otherwise, those you owe money would make it happen legally, and you can't do anything about that. That's why I said, if you mismanage your debts, you could also go bankrupt in no time.

the fact about real life is somehow the richer you are the most likely you are to loan for money because banks think you can pay for the money you are asking for but the poor ones can never get loans even if it is to start a business so they resort to loan sharks with lesser restrictions

Debts are accrued to balance up with ones demands that's why people take up loans to cover up for needs and wants and even the smallest countries go into debt to earn a wider reach and expand the economic growth because debts begets or generate more income. But then there's always certainty or situation whereby most financial goals ain't met by the individuals and that where the issue of debts becomes a problem.

Debt by itself isn’t evil, it’s a tool. Govts, corps, even rich individuals use it to expand, leverage, and grow. That’s why credit history matters—bigger trust = access to bigger capital. When used right, debt can push growth and even raise asset values you already hold.

Debt isn't bad and the rich don't get fused if they are indebted or their name is listed as debtors because they understand the business aspect laying in debt. Become a debtor and loan out money with interest to others, and become richer than you were after you have paid your debt. This is the business strategies of rich people and the reason that some people stay on top being rich. The large number of rich people are also debtors. They live on the image, trust and worthiness that they have reached and that keeps them going.

For understanding on how business people are managing their debt, we need to understand the types of debt: 1. Debt off appreciating assets 2. Debt off depreciating products. Buying an Iphone or a luxury car for loans falls into the second category of dept because you are not getting any income stream out of it whereas loan for acquiring a business or upgrading your current business or for university degree could be classified as first category of loan because you will make money out of it. And, rich people are obviously going for it. Debt, on the core is not bad but it would be bad if it is for casual spending or liabilities.

You are definitely right debt isn't all evil but it can become a problem if people who borrow take loans and find it difficult to pay back..there's a reason why a lot of people don't want to be in debt not because they are stable or don't need money but they can't be at peace when they can't sort them out...some rich individuals can get wrecked as a result of this, loans shouldn't be taken without a plan

Debt is not some mystery only to be used by rich people, in fact most of the world use it in different forms - mortgages, car finance, loans, etc. are all very commonplace. I think you mean that rich people use their existing assets as leverage to get more debt which they then invest further and that is true in some cases. However there are plenty of "rich people" who understand that it can also be very dangerous to over leverage and it can make them very poor if a crunch comes that they are not expecting, there are plenty that will also not even bother with debt as it can lead to those sort of calamities - why risk everything you have now in order to squeeze a little bit more, it is excessively greedy behavior.

Debt is good and yeah it plays major role in the wealth creation of one but it is not just simple as that. When it comes to money the emotions take control over the decisions that is why often people tend to sell sooner than they intend that ends up in a loss or less profit. One needs to be extremely rich to play that game that is why it is easier to make the second million than the first million and so on.

And here, guys, you have the example of why you shouldn't talk in public when you don't know the basics about the economy , you have always skipped school and you believe of course, in everything you learn from morons on youtube and TikTok. Let's get over the fact that the whole thing is a contradiction, as the evil rich guys sell assets, then they borrow against the assets they already sold...so..god forgive the absence of logic but let's go over the borrowing part There is absolutely nothing wrong in getting loans on your assets - you're doing this with a mortgage, everyone is doing it - just because you take a loan on your assets doesn't mean you don't pay interest!!! - if the value of the assets you have put down for a loan goes down, then you lose them all as they get liquidated Example!! We all know Musk bought Twitter now x with loans backed with his shares of Tesla, but: https://financialpost.com/fp-finance/twitter-interest-payment-elon-musk

For an individual, whether debt is good or not depends on the purpose of the person. If debt is acquired due to the need for investment, then it can be said to be a good one since the debt will be used to generate money that can be used to pay the debt and even strengthen the financial capability of the debtor.  When it is used just to buy a luxury item, then that would be a waste since these items depreciate over time, making the debtor lose money the moment they buy the luxurious item.

In view that you understand the angle of debt that the rich can shoulder, off course I wasn't saying the rich would prefer to buy iphone in debt because that in itself is not what the rich will borrow money for. They see it as liability. The kind of debt that I was referring to is that whose liquidity is further plunge into existing business as expansion or a fresh business opening as diversification. If you borrow money to buy iphone without using it to generate into from whatever use on it but you are just using it for calls and snap selfie photos then you have make a mistake. Debt from loan is suppose to be paid back from the proceed of the investment it was used for which is the first category you mentioned.

Governments sell debt to investors through public titles, which generate interest income for holders, usually paid in a monthly basis. That sounds profitable at first glance, but it's not, because governments are constantly changing the rules of the game. The more debt they create and sell through public titles, less the currency values. So, even though interest income is being paid correctly and recurrently, its purchasing power is decreasing considerably. That is the biggest legal ponzi scheme ran by authorities. The scheme just doesn't ruin like the ones we see around, because it's done in homeopathic doses, instead of offering huge interest rates. For that reason, avoid fiat currencies at all costs, and also the investments which pay you cheap interest through them. From my personal experience, I've been observing prices of goods and services increasing more than 10%-15% each year, while such investments offered by banks pay around 12% yearly... It means you are slowly losing purchasing power, although the numbers are growing on your banking balance.

Most rich people try to plan their debt properly. Many of them are in debt but if you want to calculate based on what they own they are not really in debt. Most of them use debt so that they can avoid tax because in many countries you cannot tax borrowed money. The rich people use the money that they borrow to invest or buy assets and they make sure they spend it in something that will bring profit. This kind of people are not really in debt those that are in debt are people that are living in credit so they are spending the borrowed money on things that are not bringing more money and because of that they start to go more in debt since they do not have profit to cover for it.

Govt debt + bonds look safe, but real returns are often negative after inflation. They pay interest, yes, but at the same time they keep diluting the currency. So on paper you’re earning, in reality your purchasing power is leaking year by year. That’s why it feels like a legal ponzi. Not explosive like scams, but slow and steady. Small yields, steady inflation, rule changes whenever it suits them. Banks paying 10–12% while real inflation on goods/services is 15%+ means you’re losing silently. Balance goes up, life gets more expensive.

You got it very well. I also think the same. There is no other reason why a billionaire would take $1 million-dollar loan from banks while his other bank account has more than this and it's just sitting in his account. It's just because they want to avoid paying tax. I often see such reels on social media about how you can also avoid paying taxes. These people share how rich people avoid paying too much tax. Even though my earning isn't halal, I don't take loans from the banks because it's not halal either. But I feel like, I will have to take loans as well.

This is exactly why debt-based economies like the US economy are Ponzi schemes and will experience catastrophic collapses. We've already seen one catastrophic collapse back in 2008 which was the first sign of this serious problem in the debt-based economy. A dire sign that led to the creation of Bitcoin which we all love and have adopted. The next collapse could be a lot more catastrophic and last longer compared to the previous one since these things tend to grow as that debt grows, it's like a disease... One of the side effects of this disease ridden economy is the extremely unfair distribution of wealth and creation of a minority "oligarch class" that will end up controlling the entire wealth and regulations in a way that would only benefit them and them alone. That 1% gets ultra rich while the 99% sinks into absolute poverty.

The banks don't need precious metals as a collateral in order to create new money. The new money is being created via fractional reserve banking by the commercial banks and quantitative easing by the central banks. The prices of precious metals are going up because there's FUD on the global financial markets and the investors are buying more "safe heaven" assets. You are right about the rich people selling at ATH and using debt as a tool to help them acquire more assets. There's nothing wrong with this. This is the smart way to use debt. Unfortunately most people are dumb and they use debt to buy more liabilities(cars, houses) or to consume more stuff and buy garbage they don't need.