Thread by @srinicaps

The #Fed wants #inflation

The single biggest issue for the world today is that there is too much debt in the financial system
Globally the debt to GDP ratio is 322%
Amongst G-7 nations, the numbers are striking
The U.S.’s Debt to GDP is 106%
Germany’s Debt to GDP is 61%

Japan’s Debt to GDP is 236 %
The United Kingdom’s Debt to GDP is 85%
Canada’s Debt to GDP is 89%
France’s Debt to GDP is 98%
Germany is the only country that has been aggressively paying down its debt
Germany’s debt to GDP skyrocketed to 82% as its economy collapsed

Now there are three ways to deal with excessive debt

1) Pay it off through growth or fiscal restraint.

2) Default/ restructure

3) Attempt to inflate it away by debasing your currency

Of these, the only viable option is #3
This sounds like a complicated idea, but really, inflating the debt away means money printing
This is the only option major nations have today and it’s one that policymakers prefer to use as the COVID-19 pandemic has revealed

In response to the Great Financial Crisis of 2008, central banks printed $12 trillion in new money from 2008 to 2012
They’ve already printed HALF of this in six months ($6 trillion and change) in response to the COVID-19 pandemic and when you include stimulus programs

the number swells to $15 trillion

What do Investors like as inflation hedge
1) investing in an asset that is expected to increase its value over specific period of time , Eg: Gold , Silver , Growth Stocks especially Saas & Tech companies

2) REIT Real Estate Investment Trust

Credits

#GrahamSummers

@threadreaderapp
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