The screws are tightening.
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The screws are tightening.
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burn them
dumbest action in human history since hitler fought in russia, in the winter, after napolean tried that once and it didn’t go well or someone went margin long pets.com…
people, this is not a question of the prospect of inflation (which is the solitary actual concern here), it is a question of the prospect of ability to pay. The US government has unlimited ability to pay with inflation the only possible consequence.
I support people discussing the possibility of excessive debt leading to hyperinflation, but that’d be a reasonably easy debate, as the assumption that the US is on the verge of major inflation is just not founded in a proper understanding of a fiat monetary system. No harm in debate.
BUT, what S&P rates is our ability to pay. Which is literally and unquestionably infinite. We CAN’T BE a European country.
For anybody who thinks high gov’t deficits are the end of days I have a few questions
1. what about japan? lowest bond rates around, no inflation. Their best economist says the whole problem was lack of adequate deficit…
2. and why, now, as the US debt swells and we get downgrades, isn’t this hyperinflation scenario playing out? you know, the “china quits buying our bonds, yields go to 20% overnight, earth ends” one? Why is that? You can read up on modern monetary theory to learn why yields are lower than ever…
We all have views and opinions, and I spent an entire lifetime with mine. But one day I realized while driving that the federal debt is really just the supply of dollars… And then I found MMT and I had to change my tune a bit.
if the facts change I guess I change my mind, all of that.
And for this situation there is just one fact (and I’ll add a few opinions)
-the US cannot default on its debt except by choice, that is a fact
-S&P clearly doesn’t even have a basic understanding of how modern monetary systems work, not even a remedial one. If thats NOT a fact i’d love to see how it isn’t give the scope of their folly.
-if you could get the phone records and email records of everybody from S&P over the last 2-3 weeks you would have the greatest insider trading scandal in history, probably worth a trillion dollars, all laid out. I think Scott said that first.