Schiff is unwavering in his beliefs. For that i give him credit. Let’s hope he will be dead wrong for ever.
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There is no risk in lending to the governement since they can leverage low rates from the fed for the next years… and if bonds blow up.. well the banks are too big to fail right ?
There is indeed risk. First there’s inflationary risk, loss of purchasing value even if they pay obligation. But also while there is no theoretical risk otherwise, you could easily have a default like we “nearly had” due to the political process.
i agree with joe… only wage inflation is a key component in the equation for us. the rest of the world gets inflation immediately.
the inflationary potential of government spending right now is muted by the large slack capacity in the economy, and the inflation in wages can’t begin without an improvement in the economy. A sustained and meaningful improvement in the economy isn’t likely (or probably even possible) without improvements to personal balance sheets (underwater mortgages, credit card debt, etc.). And that is not likely (or maybe impossible) without either a massive default wave / deflationary depression (bad) or government intervention (not as bad).
hand every homwowner either a $30k reduction in their mortgage OR $30k of 10 years that have to be held to maturity or something like that. (this has happened before, in WW2).
remember, the deflationary depression of the 30s didn’t ultimately give way to a super economic recovery, what did was massive stimulus, courtesy of the need to smack the Nazis.