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If I’ve learned anything during the pandemic, it’s “that’s not how money works”. If it runs out, they’ll just borrow more. The real question is at what point a
by listless 5y ago
If I’ve learned anything during the pandemic, it’s “that’s not how money works”. If it runs out, they’ll just borrow more. The real question is at what point are we so leveraged that we default on bonds because we can’t meet our obligations? 10 years? 100 years? I don’t think anyone can answer this. But this is how it will likely end.
- OldHand2018 5y agoIsn't it more like 3 weeks, according to Janet Yellen?
- smaryjerry 5y agoThat’s if we don’t borrow any more money beyond the debt limit before then. The real question is when will people stop lending to the borrower? That will be when inflation gets high enough to our pace the rates you can safely receive elsewhere. For example, if inflation is 3% per year and you are only getting 2% yield, it doesn’t make sense to lend anymore because your getting about -1% return… unless every other country with a guaranteed return is returning even less due to their own inflation. Say Germany’s rates are 0% but inflation is 0%, lenders should simply be holding German dollars and stop lending to the US. Then the US will default dude to not being able to borrow.