4 ms·

There is only 1 solution to the global debt crisis and thats inflating the currency. They did it after WW2 and they will have to do it now. There is no other op

There is only 1 solution to the global debt crisis and thats inflating the currency. They did it after WW2 and they will have to do it now. There is no other option. They can do it sneaky through fake measures of inflation, keeping a lid on cost of living adjustments, but ultimately they soak bond holders and standard of living. You see it everywhere in things they can’t inflate. The price of houses and gold most obviously, but you see it in commodities that can’t expand production quickly as well. The solution is to buy assets of course.

whimsicalism 1y ago
Monetizing a debt of this magnitude would be disastrous, but agreed this appears to be the path we are going on by default - given that we are consistently above the inflation mandate yet still lowering rates. It's no longer the early 20th, there are other competitive & well-run jurisdictions for creditors to dump their money in if they lose faith in the US.
- disgruntledphd2 1y ago
  > It's no longer the early 20th, there are other competitive & well-run jurisdictions for creditors to dump their money in if they lose faith in the US. Where, pray tell are these competitive and well-run jurisdictions? China has capital controls so that probably won't work. The EU might work if they ever get their sh*t together and centralise their bonds and markets, otherwise no. Like, I too believe that the US is on an unsustainable path, but I just don't see where all that money is gonna go (specifically referring to the foreign investment in the US companies/markets here).
  - whimsicalism 1y ago
    I think there are many smaller jurisdictions that are getting their shit together and might absorb demand - southeast Asia, Singapore obviously (but small), the Gulf. Some subsets of the EU, particularly Eastern Europe. Plus, even worse-run higher yield jurisdictions become more appealing as the US fails.
    - disgruntledphd2 1y ago
      It's more about volume than anything else. You or I could invest elsewhere but where do all the foreign holders of Treasuries and US stocks put their money?
      - whimsicalism 1y ago
        Yes, I understand your point very well. My point is two-fold, 1. that many small and stable jurisdictions can absorb excess capital even if there isn't a single stable player as large as the US, 2. it makes higher yield less stable jurisdictions more appealing on the margin. Ultimately, capital will flow away from the US if our fiscal stability is increasingly in question.
  - AnimalMuppet 1y ago
    Switzerland?
    - disgruntledphd2 1y ago
      If you avoid their banks, then maybe. Still not big enough though. I feel like eurobonds or remnibi bonds are the only options, but both don't work for various reasons.
CyberDildonics 1y ago
Will have to do it now? There was a huge amount of money printed off after covid.

whimsicalism 1y ago

Monetizing a debt of this magnitude would be disastrous, but agreed this appears to be the path we are going on by default - given that we are consistently above the inflation mandate yet still lowering rates. It's no longer the early 20th, there are other competitive & well-run jurisdictions for creditors to dump their money in if they lose faith in the US.

disgruntledphd2 1y ago
> It's no longer the early 20th, there are other competitive & well-run jurisdictions for creditors to dump their money in if they lose faith in the US. Where, pray tell are these competitive and well-run jurisdictions? China has capital controls so that probably won't work. The EU might work if they ever get their sh*t together and centralise their bonds and markets, otherwise no. Like, I too believe that the US is on an unsustainable path, but I just don't see where all that money is gonna go (specifically referring to the foreign investment in the US companies/markets here).
- whimsicalism 1y ago
  I think there are many smaller jurisdictions that are getting their shit together and might absorb demand - southeast Asia, Singapore obviously (but small), the Gulf. Some subsets of the EU, particularly Eastern Europe. Plus, even worse-run higher yield jurisdictions become more appealing as the US fails.
  - disgruntledphd2 1y ago
    It's more about volume than anything else. You or I could invest elsewhere but where do all the foreign holders of Treasuries and US stocks put their money?
    - whimsicalism 1y ago
      Yes, I understand your point very well. My point is two-fold, 1. that many small and stable jurisdictions can absorb excess capital even if there isn't a single stable player as large as the US, 2. it makes higher yield less stable jurisdictions more appealing on the margin. Ultimately, capital will flow away from the US if our fiscal stability is increasingly in question.
- AnimalMuppet 1y ago
  Switzerland?
  - disgruntledphd2 1y ago
    If you avoid their banks, then maybe. Still not big enough though. I feel like eurobonds or remnibi bonds are the only options, but both don't work for various reasons.

CyberDildonics 1y ago

Will have to do it now? There was a huge amount of money printed off after covid.