Fantastic conversation between @LynAldenContact & @JeffBooth today on Swan Signal.
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There are 4 ways a government can finance debt:
1. Domestic government borrowing
2. International government borrowing
3. Quantitative Easing (QE)
4. Modern Monetary Theory (MMT)
All involve taxing the people and redeploying capital into the economy.
lynalden.com/quantitative-e…
1. Domestic government borrowing
2. International government borrowing
3. Quantitative Easing (QE)
4. Modern Monetary Theory (MMT)
All involve taxing the people and redeploying capital into the economy.
lynalden.com/quantitative-e…
Government's issue bonds that individuals and institutions can choose to buy in exchange for interest payments/return of capital upon maturity.
This extracts money out of the economy as the government deploys it back in the form of public spending (ie military, public services)
This extracts money out of the economy as the government deploys it back in the form of public spending (ie military, public services)
Governments can turn to foreign markets when they run out of domestic borrowers.
This route is often chosen by emerging countries because they don't have much/any domestic capital to start with. They need foreign investment (eg China) for key infrastructure/growth.
This route is often chosen by emerging countries because they don't have much/any domestic capital to start with. They need foreign investment (eg China) for key infrastructure/growth.
Rather than tend to the deflationary shocks, the Federal reserve opts to create new dollars from its own central bank, rather than borrow existing money from the public.
By monetizing the debt, they inject money directly into the economy.
(ie Fed & BoJ)
By monetizing the debt, they inject money directly into the economy.
(ie Fed & BoJ)
MMT says that because we have a fiat currency, the government can just create money, spend it however it wants, and taxes are just a way to remove excess money afterwards to prevent inflation.
It's every new politician's 3 letters and basically cuts out the middle man.
It's every new politician's 3 letters and basically cuts out the middle man.
Debt doesn't matter until it matters.
As fun as money printing is, MMT blows the gasket by removing the training wheels on the power to create money. But has the gov't given you ANY evidence throughout history that it can be trusted to handle that power?
brrr.money
As fun as money printing is, MMT blows the gasket by removing the training wheels on the power to create money. But has the gov't given you ANY evidence throughout history that it can be trusted to handle that power?
brrr.money
Technology is deflationary and in the end, all this money printing is just window dressing.
Ultimately all its doing is creating a direct pipeline with tech companies who only benefit from it while simultaneously reducing jobs.
Ultimately all its doing is creating a direct pipeline with tech companies who only benefit from it while simultaneously reducing jobs.
Politicians want to have their cake and eat it too
Though these deleveraging events could impact the short biz cycle, the end of the ~80 long term debt cycle is what is really affected
Why? The crisis shifts from the private sector to the federal level
Though these deleveraging events could impact the short biz cycle, the end of the ~80 long term debt cycle is what is really affected
Why? The crisis shifts from the private sector to the federal level
Long term dent cycles result in currency devaluations.
There is no way to really transition without a messy environment. As a result, governments opt to kick the can down the road further and create more pain for society.
When the exit doors close they close really fast.
There is no way to really transition without a messy environment. As a result, governments opt to kick the can down the road further and create more pain for society.
When the exit doors close they close really fast.
Bitcoin was born out of the 2008 financial crisis for the exact situation we are dealing with now.
Bitcoin is a new system that provides more options for individuals to move their money & assets outside of the traditional financial system.
Bitcoin is a new system that provides more options for individuals to move their money & assets outside of the traditional financial system.
It is hard to believe why people trust the money in their pocket for we factually know governments are destroying the purchasing power of individuals.
Therefore it is negligent to not have Bitcoin in your portfolio.
Therefore it is negligent to not have Bitcoin in your portfolio.
When it comes to portfolio allocation there are three things to consider: comfort, due diligence & risk tolerance
Mix in a little bit of luck, timing & concentration of risk to produce wealth
- you're wrong you go to 0 & start anew
- you're right you create wealth & diversify
Mix in a little bit of luck, timing & concentration of risk to produce wealth
- you're wrong you go to 0 & start anew
- you're right you create wealth & diversify
The longer bitcoin establishes price history the more it will enter the macro conversation.
As it goes through the staircase increases it will reach more and more people/institutions.
As it goes through the staircase increases it will reach more and more people/institutions.
Regardless of the black Thursday crash, Bitcoin has established a strong track record for being money, its network effects & security.
Nothing in the market right now can displace it.
Nothing in the market right now can displace it.
There is not much (if anything) governments can do to stop Bitcoin from existing.
A country banning it would create more incentive for another to accept it. There is short term risk but it dwindles as each block is mined.
A country banning it would create more incentive for another to accept it. There is short term risk but it dwindles as each block is mined.
Governments prefer the easy way out.
It's easy for a politician to say they're going to pay you every month in UBI rather than fixing the root cause. Thus the constant boosting of asset prices rewards those who hold them while making them unobtainable for those who don't.
It's easy for a politician to say they're going to pay you every month in UBI rather than fixing the root cause. Thus the constant boosting of asset prices rewards those who hold them while making them unobtainable for those who don't.
This the first time in history that the global economy operates completely on fiat currency and virtually all commodities are priced in USD.
We are at the intersection of the long term debt cycle coming to an end and the petrodollar being pushed beyond its limits.
We are at the intersection of the long term debt cycle coming to an end and the petrodollar being pushed beyond its limits.
This is an uncertain time but take a moment to consider why this is happening.
For the complete conversation check out the link below:
For the complete conversation check out the link below:
