To The Moon

Let me ask you a question.

If every country in the world is in debt — the US, Japan, Europe, and even Singapore — who exactly is this money owed to?Have you ever thought that this question might actually have no clean answer?Because if every country is a debtor, logic says someone must be the creditor.

But when you dig into the data, ask around, and flip through the reports, you discover something very strange: almost no country dares to openly admit that it is holding the world’s money.

Every country is crying poor.

Every country is borrowing.

Yet the money that is being lent out still has to land somewhere on someone’s books.Last year the Institute of International Finance put out a figure: total global debt hit US$348 trillion.

What does that number mean?

If you take all 8.1 billion people on Earth and divide the debt equally, every single person — from a newborn baby to a 90-year-old grandparent — would owe more than US$40,000.

In Singapore dollars that’s over S$50,000.

And the number is still climbing.

In just one year nearly US$29 trillion was added — the fastest increase since the worst pandemic years.

Global debt now stands at about 308% of global GDP.

In other words, the entire planet’s annual income is nowhere near enough to cover what everyone owes.Sounds terrifying, right?

But here’s the even more terrifying part:

You might think this is a ticking time bomb about to blow the world up.

The reality is that this system has been running for decades.

It hasn’t collapsed. Instead, countries are borrowing more aggressively every year.

The US, China and the eurozone alone accounted for three-quarters of the new debt.

Governments are not being forced to borrow — they are choosing to keep borrowing, year after year.That is what I want to unpack for you today.

Not to scare you, but to help you understand a truth most people never grasp in their lifetime:

Where does all this money in this never-ending global bill actually go?

Who is bearing the cost, and who is benefiting?

And what role do ordinary people like you and me — who go to work every day and try to save money — play in this bill?After you finish this, you will look at news about national debt, inflation, interest-rate hikes and cuts with completely different eyes.

First, let’s clear up a common misunderstanding.

Many people think when a country is in debt, it means it owes money to other countries — like owing China, or Japan, or some invisible foreign creditor.

That picture is dramatic, but the truth is more complicated.Take the United States as an example.

US federal debt has already smashed through US$40 trillion, around 130% of GDP.

This debt is issued in the form of US Treasuries.

So who is actually buying these Treasuries?

You might think it’s mainly China, given all the talk about US-China rivalry.

In reality, the biggest holders are American pension funds, insurance companies, banks, and the Federal Reserve itself.

In other words, a large part of what America owes is owed to Americans.

The government borrows from its own people, and those people put the IOUs into their retirement accounts as assets.Sounds contradictory, doesn’t it?

How can the left hand owing the right hand be a problem?

This is exactly the strangest — and most durable — feature of the whole game.

It is why the system has kept going for decades without blowing up.

As long as new debt can be issued fast enough to roll over the old debt, and as long as people keep buying, the bill can be pushed further and further into the future — to the next generation, and the one after that.Do foreigners play in this game?

Yes, and deeply.

Over the past 40 years, European pension funds, Japanese insurers, British trusts and Middle Eastern sovereign wealth funds have poured the retirement savings and insurance premiums of their own citizens into US markets.

Why? Because US stocks have risen a lot, the dollar has stayed strong, and US Treasuries are still seen as one of the safest assets in the world.

That money crossed the Pacific and the Atlantic, flowed into America, and helped power decades of US stock-market gains.So you arrive at a rather cruel fact:

This global debt game is not really one country owing another country.

It is the world’s pension money, insurance premiums and savings, packaged layer upon layer into different assets, holding one another and depending on one another, woven into a net that no one can easily untangle.

The money you keep in the bank may end up, through an insurer, buying government bonds.

The CPF contributions you make may end up, through funds, invested in global equities.

This bill has long been linked to your wallet and mine — we just don’t see the thread most of the time.Now comes the more fundamental question:

If everyone owes so much, why hasn’t the world collapsed?

How do governments keep kicking this can down the road year after year?The answer is three words: print money.When a country’s debt becomes too big to repay by normal means, the most direct and brutal solution is for the central bank to create more money, buy the government bonds, and give the government cash to keep spending and keep paying interest.

It sounds convenient.

But there is a price.

That price does not appear on the government’s books.

It is quietly transferred onto every ordinary citizen.

The price is inflation.You might think, “Inflation has nothing to do with me — I don’t owe the government money.”

You would be wrong.

You are being slowly stripped of purchasing power by this system in a way you barely notice.Imagine you put S$100,000 into a bank fixed deposit earning 1.5%, while inflation is running at 3%.

A year later the number in your account has grown to S$101,500.

But the things you can buy with that money are less than a year ago.

Your money has not lost a single cent on paper, yet in real terms it is quietly shrinking.

There is a technical name for this: financial repression.

In simple terms, the government keeps interest rates low and allows inflation to run, quietly transferring the purchasing power of your savings to help service the national debt.

You did not volunteer for this.

You may not even realise it is happening.

But your wealth is helping the government pay its bills.This is not a conspiracy theory.

It is a script that has been repeated throughout centuries of financial history.

When a country’s debt grows beyond what normal methods can handle, inflation is the government’s favourite knife — because it is quiet.

It does not need a parliamentary vote.

It does not make headline news saying “government raises taxes again.”

It just leaves you with a vague feeling that everything is getting more expensive while your salary is not rising as fast.Here you might push back:

“Japan’s debt is even more extreme — over 260% of GDP, among the highest in the world.

Yet Japan has survived for decades without collapsing. People still go about their lives.

So maybe debt is not as scary as we think?”That statement is half right.

Japan has managed to keep going for decades thanks to ultra-low interest rates and the fact that domestic households and institutions hold most of the government bonds.

But that does not mean there has been no cost.

Japanese wages have barely grown for decades. Young people find it hard to buy homes. Society has been stuck in a low-interest-rate, low-growth box.

It did not go the dramatic Sri Lanka route of declaring bankruptcy.

It paid the price in a slower, quieter way: an entire generation of stagnation.That is the real danger of heavy debt.

It does not always make a country collapse overnight.

It just makes everyday life for ordinary people tighter and tighter, with fewer chances to get ahead.Now you might be thinking:

“That’s the US, that’s Japan, that’s international stuff — what does it have to do with us in Singapore?”Quite a lot, actually.If you look at Singapore’s government debt figures, the gross debt is large — well over S$1.3 trillion, or more than 160% of GDP.

On a per-person basis the number looks high.

But Singapore is different from most countries.

A large part of this debt is not borrowed to fund spending.

Much of it is issued for non-spending purposes linked to our reserves and CPF system, and Singapore holds substantial assets that more than cover the liabilities.

Officially, Singapore has net assets, not net debt, and maintains top credit ratings.That said, the broader point still applies.

As our society ages and the old-age support ratio worsens, the pressure on future budgets and transfers will grow.

The generation now in their 20s and 30s will face a heavier load of supporting retirees while dealing with high housing costs and the need to build their own retirement nest eggs on top of CPF.

You may have heard older generations say young people don’t know hardship, don’t save, and spend on coffee and lifestyle.

Fewer people are willing to say honestly that the younger generation is inheriting a structural shift: higher asset prices, wages that struggle to keep up with costs, and the need to prepare more carefully for retirement in a world of persistent government debt and inflation.This is not scaremongering.

It is visible when you look at the numbers.

You are not lazy.

You just happen to be living at the point when this global bill is starting to demand more attention.The political script is familiar everywhere.

During US elections, parties accuse each other of leaving debt for future generations.

Yet regardless of who is in power, borrowing and spending commitments tend to rise over time.

“Debt for our children” becomes a slogan used to attack opponents rather than a problem anyone fully solves.

In the end, the people who will carry the real load are those still contributing to CPF and taxes, who have not yet started drawing their retirement benefits.That is one reason more younger Singaporeans are thinking carefully about whether CPF alone will be enough, and whether they need to build additional buffers.

Looking further afield, why can heavily indebted developed countries like the US and Japan keep borrowing without immediate crisis, while places like Sri Lanka declare bankruptcy and Argentina’s currency can collapse overnight?The difference lies in who has the privilege of printing their own currency that the rest of the world is willing to hold.

The US borrows in dollars, and the dollar is the world’s main trading and reserve currency.

So America can dilute its debt through money creation, and the rest of the world shares the cost.

Economists call this “exorbitant privilege.”

Most developing countries do not have that ticket.

They often owe debt denominated in dollars.

When their own currency weakens, the dollar debt becomes heavier, leading to default and direct pain for their citizens.A World Bank report put it bluntly: in recent years, developing countries paid out more in debt service than they received in new loans — by hundreds of billions of dollars.

Money that could have gone to schools, hospitals and infrastructure flowed back to creditors instead.That is the most ruthless part of this global bill.

The cost of debt is never shared equally.

The weakest always fall first.So back to the original question:

If the whole world is in debt, who is the money owed to?Now you have a clearer answer.

On the surface, countries owe one another — the US owes Japan, Japan holds US assets, governments owe their citizens, and citizens hold government bonds through their pensions and savings.

But at the deepest level, the system is borrowing from the future.

From the generation not yet born.

From the portion of salaries not yet eaten by inflation.

From every ordinary person who still believes that hard work and saving will lead to a secure retirement.This bill has never really been signed off by anyone.

It has simply been rolled forward, generation after generation, through money printing, inflation, and longer repayment horizons — until one day someone has to pay.As an ordinary working person, what can you do after hearing all this?Honestly, you cannot stop the central bank from creating money.

You cannot stop the government from deciding its budget.

But you can do one thing: stop understanding money the way the previous generation did.The previous generation believed that putting money in the bank and leaving it there was safe.

In an era when governments lean toward using inflation to manage debt, doing nothing is itself a risk.

Because your purchasing power is being steadily taken by the system.What you need to understand is how inflation erodes savings, and that asset allocation is not only for the rich — it is basic knowledge for anyone who wants to protect the money they worked hard for.

This is not about chasing get-rich-quick schemes.

It is about recognising that the rules of the game have already changed.

If you keep saving with the old mindset, you are more likely to be the quiet person who ends up paying for this global bill.Ask yourself three simple questions:Is some of the money sitting in your bank accounts or low-yield products currently losing to inflation without you noticing?

If governments respond to high debt with looser monetary policy in future, will the assets you hold lose value, hold value, or have a chance to grow?

On retirement, are you relying entirely on CPF and company schemes, or have you started building an additional path for yourself?

You do not need perfect answers right away.

Simply being willing to think about them already puts you ahead of most people.

Because most people never realise they have been quietly paying the cost of this global bill all along.That’s all for this piece.