Well, most debt that makes money isn’t simply just paying interest.

Here’s a meme to explain;

What actually happens is that debt isn’t simple, its repackaged, clumped up, split up, and resold.

Thanks to FIAT, being essentially Debt backed Dollars as currency, our system has long since given up on simple debts since 1970s.

-And ever since the Glass Steagall Repeal in the 90s, Commercial Banking and Investment Banking worked overtime to invest the Creative Accounting from their Tax Avoidance department to generate new ways to make money from selling debt. Creative Debt money making.

And now it’s a world wide practice, to buy and sell debt and make money. Not from collections, but from gambling speculation to have a safe store of asset comparative to T-Bonds and T-Bills to offset fluctuations on FOREX exchange due to fluctuating markets.

Worried about the US dollar? Buy Chinese and Japanese Debt, Government Debt as bonds, or Public Sector Debt as stocks, senior securities, or some other form of debt-equity.

Welcome to the modern solutions of 21st Century.

Debt-Equity, the new Gold Squared.

Examples of Debt in Housing

Remember 2008? Yea, it’s gotten worse.

Sell a House, call it a Mortgage Backed Security, then put it all in a bunch of baskets, cut up the baskets, slap a AAA Bond rating on it as a CDO, chop it up, put it in other CDO’s, and perpetually have a Russian Nested egg, with people Betting on CFD’s and other shit. Gambling degeneracy ensues.

But the typical practice is, a Loan is Originated from a home sale, and that loan gets packaged with a bundle of loans, and then split up into small pieces that get repackaged and resold to others. So your loan gets sold over and over again, but you can’t buy your loan in totality.

And that also includes the insurance that backs up the bets of these degenerates. Bonus points for termed insurance.

• Residential Mortgage-Backed Securities (RMBS): Backed by residential home loans.
• Commercial Mortgage-Backed Securities (CMBS): Backed by loans on commercial properties like office buildings, malls, and hotels.

Remember the Glass Steagall Repeal? Yea, just Consider RMBS and CMBS as MBS. They’re practically the same and packaged in all kinds of ways. I mean, do you really want to know how your sausage is packaged?

Examples of Debt in Student Loans

Additionally, Government subsidized loans for student loans is actually a ‘grade A’ asset in terms of debt equity. You mean the government is gonna back these loans? That’s government backed debt, practically as good as dollar bills.

It’s a shitty shame that interests rates for student loans are borderline usury, and payment practices are less than interest accumulation in a compounding rate. Typically simple interest added daily. But that shit adds up if you make the minimum or less than minimum payments (which typically are set like quicksand).

Here’s Chat GPT with some words, and here is Google with the pictures because I got lazy and didn’t want to actually tell you how it’s really made;

Pooling Loans: A lender or institution bundles many student loans together into a portfolio.

Creating Securities: The pooled loans are used as collateral to create financial instruments called Student Loan Asset-Backed Securities (SLABS). These securities represent claims on the future cash flows from the student loan payments.

Tranches: SLABS are divided into different tranches (tiers) based on risk and expected return. Some tranches have higher risk and higher potential return, while others are safer with lower returns. Selling to Investors
These SLABS are sold to institutional investors like hedge funds, pension funds, insurance companies, and mutual funds. Investors buy them because they offer returns based on the interest payments from the underlying student loans.

Repackaging and Derivatives
Repackaging: Some SLABS can be repackaged into new financial products to attract different types of investors. For example, tranches from different SLABS might be combined to create new securities.
Derivatives: Financial instruments like credit default swaps (CDS) can be created based on SLABS. These derivatives allow investors to bet on whether borrowers will repay their loans or default.

Gambling on Default Rates: Hedge funds and other speculative investors may buy or sell derivatives tied to the performance of SLABS. They might bet on increases or decreases in loan default rates or the impact of macroeconomic trends (like changes in unemployment or interest rates) on repayment.

Market Liquidity: The trading of SLABS can create liquidity, enabling investors to enter and exit positions. However, this also introduces volatility and risk.

Role of Rating Agencies
Agencies like Moody’s or S&P assess the creditworthiness of SLABS. A high rating can make a SLABS more attractive to investors. However, these ratings may not always accurately reflect the underlying risk, as seen in the 2008 mortgage crisis.

Impact on Borrowers
For borrowers, this securitization and trading process is largely invisible. However, it can influence the availability of loans, interest rates, and repayment policies.
Private lenders might be incentivized to issue more loans if they know they can quickly offload them through securitization, potentially leading to riskier lending practices.

So Student Loan Forgiveness won’t be a debt jubilee, but rather a government Buy Out or something. Because, well, this shit is a Gordian Knot of fuck shit.

Also, for degeneracy purposes outlined above, I want to make mention that we have Bespoke Tranches and related CDO and CFD related products out there gambling in the market.

How much of any of this gambling shit is necessary? I don’t fucking know at some point. When the gamble is on a gamble of a derivative of a derivative, I personally would think you’re too far down an Inception Rabbit hole. But I’m not a Managing Director, so beats me.

Some more examples

-Auto Loans
-Medical Debt
-Insurance broadly speaking
-Equity Loans
-Personal Loans
-Business Loans (Including SBA Small Business loans)
-Credit Card Loans
-Vehicle Leases
-Logistics and Government Contracts
-Weapons Contracts
-Delivery Contracts
-Futures Contracts, including Commodities and Water
-Land Contracts, Water Contracts
-Energy or Green energy Contracts
-Cell Tower or Infrastructure contracts

Additionally, to add, Contracts that act as a Promissory note with a form of assurance or debt or guarantee and a guarantor can be treated as a collateralized loan, and can also be gambled on and packaged similarly above.

Bonus points to value if the contract has Insurance, or is Government Backed.

Don’t you just love man-made gambling horrors beyond your comprehension?

Glad we’re doing a lot better stuff for society then selling Tulips. (sarcasm).

In Closing

Yea, so Debt is used as an asset. One man’s debt is another man’s asset. And these ‘asset backed securities’ are basically just ways to print more FIAT money through loan generation and Credit Expansion.

Essentially we’re using one loan to create more credited interest that gets sold and resold and repackaged and resold over and over again to increase credit worthiness. All of these transactions and time can be gambled upon through contracts and swaps too, by the way.

And the real kicker is, that often times they’ll let some shitty shell company handle all the debt and tank and go under. So the Companies that work with these Assets can keep their ill gotten gains, and the Debt holders are left holding the bag artificially, and someone else in Vulture Capitalistic Take will buy out the Debt holders and repackage and resell the ‘distressed assets’ at discount for more credit and money.

Yea. Idk if you know. But Bankruptcy is actually profitable if done right.

All of the above is for jokes and is mere speculation and I point at no company directly doing it.

How DARE some Companies act like PSEUDO Money Printers by creating FIAT from DEBT-CREDIT generation. How dare they expand money supply through credit generation. That’s supposed to be our Money Secret.

*Not Valid Financial, Legal, Life, or Any Advice