Counter Punch has the Michael Hudson article The Coming Savings Writedowns.
Debts that can’t be paid, won’t be. That point inevitably arrives on the liabilities side of the economy’s balance sheet.
But what of the asset side? One person’s debt is a creditor’s claim for payment. This is defined as “savings,” even though banks simply create credit endogenously on their own computers without needing any prior savings. When debts can’t be paid and debtors default, what happens to these creditors?
I am a follower of Michael Hudson. I have read part of his book “… and forgive them their debts“. This might be from the part I haven’t read yet. I understood the write-down of debts, but somehow the write-down of savings as a necessity had escaped me.