Thread by @ndwork

@Aamir07690510 @CharleeeConway @michaeljburry This plot along with your other recent tweets, imo, explains the diminishing confidence in the dollar. Let's put it like this; do you think people paying social security today will be able to live on it when they retire? The answer is obviously no. Everyone converts their 1/x

@Aamir07690510 @CharleeeConway @michaeljburry dollars to assets. Storing dollars under the mattress is a losing proposition; you will necessarily lose purchasing power. At first, the dollar was pegged to gold. Should inflation become unsustainable, the Fed will have to raise interest rates (regardless of unemployment). 2/x

@Aamir07690510 @CharleeeConway @michaeljburry This will increase the cost to service the debt, requiring a reduction in decrease in spending. And then, we will have to pay the piper. And that's the GOOD scenario.

Alternatively, the government can continue to print dollars to service previous debts. Knowing that 3/x

@Aamir07690510 @CharleeeConway @michaeljburry dollars will be printed, people will stop lending to the government at small interest rates. (This has already happened.) This will increase interest on long term US debt, increasing the cost of servicing the debt, requiring printing more dollars, leading to more inflation. 4/x

@Aamir07690510 @CharleeeConway @michaeljburry One hope is that deflationary pressures continue to keep the government's irresponsible spending at bay. This is largely from technological advances: cheaper cars, cheaper energy, more efficient communication, etc. However, there must be a limit when technology can no 5/x

@Aamir07690510 @CharleeeConway @michaeljburry longer compensate for irresponsible governance. When is that? Maybe you're right, and we have a long way to go. I have to believe, though, that printing multiple trillions of dollars per year will be a significant stress test of this idea.

I guess, only time will tell. 6/6

@Aamir07690510 @CharleeeConway @michaeljburry @threadreaderapp unroll