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The Fed is run by human beings, whom have biases and flaws. The US economy is strong, however its fiscal discipline is not. Federal debt to GDP ratio is at an
by coralreef 6y ago
The Fed is run by human beings, whom have biases and flaws.
The US economy is strong, however its fiscal discipline is not. Federal debt to GDP ratio is at an all time high, and will only go higher. Abstract this graph out at current trends:
https://fred.stlouisfed.org/series/GFDEGDQ188S https://fred.stlouisfed.org/series/GFDEGDQ188S
Public debt growth is outpacing GDP growth, so its only a matter of time.
Do we anticipate that politicians will suddenly become conservative and start paying down debt? Unlikely. The pressure to keep the economy going and win elections is too strong. The power to create money (or artifically low interest rates) is a heroin addiction, impossible to wean your economy off of.
If you had to lock your wealth in over the next 10-25 years, you're not buying US government bonds. You're hiding out in gold, housing, and stocks. The dollar is not an asset you want to be part of.