By keeping an eye on the amount of debt that needs to be paid relative to the amount of hard money that there is to pay it, and the amount of debt payments that have to be made relative to the amount of cash flow the debtors have to service the debt and the interest rewards that one is getting for lending one’s money, one can assess the risk/reward of holding the time bomb.
Annexure: https://www.linkedin.com/pulse/changing-value-money-ray-dalio/?published=t
"In cases in which the debt relief facilitates the flows of this money and credit into productivity and profits for companies, rising real stock prices (i.e., the value of stocks after adjusting for inflation) happens. When it sufficiently hurts the actual and prospective returns of “cash” and debt assets so that it drives flows out of these assets and into inflation-hedge assets and other currencies, that leads to a self-reinforcing decline in the value of money."
[All US TIPS currently yielding negative. Track US Treasury Inflation Protected Securities (TIPS):
https://www.bloomberg.com/markets/rates-bonds/government-bonds/us ]
"After devaluation, the outcomes diverge significantly across the cases, with a key variable being how much economic and military power the country retained at the time of the devaluation, which impacted how willing savers were to continue holding their money there."
"In the case of the US, there were two big abrupt devaluations (in 1933 and 1971) and more gradual devaluations against gold since 2000, but they haven’t cost the US its reserve currency status.
Typically leading up to a country losing its reserve currency position 1) there is an already established loss of economic and political primacy to a rising rival that creates a vulnerability (e.g., the Dutch falling behind the UK or the UK falling behind the US) and 2) there are large and growing debts that are monetized by the central bank printing money and buying government debt, leading to 3) a weakening of the currency in a self-reinforcing run from the currency that can’t be stopped because the fiscal and balance of payments deficits are too great for cutbacks to close."