People are starting to say 'deficits don't matter' just as they matter more than ever
Owning a non fiat store of value is more important than ever
In 2022 the govt officially turns into a ponzi
This is historically when fiat currencies collapse
We'll need more debt just to fund EXISTING DEBT. This is like rolling credit cards. The US will be running a ponzi
Who would loan us money?
Foreigners, historically the largest buyers, realize this
And theyve stopped buying our treasuries as a result
The trade war. Foreign sanctions.THIS is the cause
But this crowds out other investment. Specifically the equity markets, causing massive reflexivity
Stock prices will decline, driving up deficits even further because of the wealth effect
2008 was a socialist policy for bankers
The rest of the country wants a similar socialist policy
And with the likes of / rhetoric of Bernie & AOC, they'll probably get it...
The only way to finance NEW spending will be the fed balance sheet
Despite purportedly selling off the balance sheet, it's going to go the other direction
The money printing machine is going to get revved up again
The Fed will be forced to, and holders of the currency will take the hit
According to @RayDalio
“You easily could have a 30 percent depreciation in the dollar through that period of time.”
The fed has already turned most of these dials
We've been on QE novocaine for 10 years already
Next crisis, when we really need the monetary ammunition the most, we'll be out of bullets
Can the Fed soften the blow of the next collapse?
But if there’s a exit / neutral arbiter of value, the market wont finance a govt that can only bail itself out w. more debt
The scarce asset will offer better real returns
The debt holders are more senior. Equity holders will be diluted to pay them off
When people realize this, they will rush into scarce assets and "sell off the equity"
Assets like BTC and gold will skyrocket in value
Meaning, if you're not in these assets *before* the move, you're riding the sinking ship lower
Populism. MMT nonsense. Demographic shifts
The people running the presses aren't buying fiat currencies. They're buying a 'worthless rock'