debt inflation Macro Tourist

Here Is One Trader’s ‘Philosophical Friday’ Debt Rant

"Now you might look at these charts and say, 'Greece spent too much and suffered the consequences. Ultimately they will be better off taking the hit and reorganizing in a more productive economic fashion.' If so, you probably also still have this poster hanging in your room at your parent’s house where you grew up."

"Now you might look at these charts and say, 'Greece spent too much and suffered the consequences. Ultimately they will be better off taking the hit and reorganizing in a more productive economic fashion.' If so, you probably also still have this poster hanging in your room at your parent’s house where you grew up."
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6 comments on “Here Is One Trader’s ‘Philosophical Friday’ Debt Rant

  1. Big Stevie

    Great insights. Please keep the big-picture philosophy stuff coming.

    Kevin Muir is correct. Spending is neither inherently bad nor good. Careful and diligent borrowing can be used to augment growth. Generally, short-term loans make sense when they generate new revenue, can be paid back early (or at least on schedule) and don’t cut into cash flow too much.

    Unfortunately, America is getting all of that wrong on a massive scale. It’s not just our government that’s the problem. Corporate and household debt levels are also staggering — and accelerating.

    As Jim Rickards states, the U.S. is in a “debt death spiral”. The combination of (a) creating new debt, (b) rolling over existing debt and (c) continuing to pile up interest is triggering a systemic loss of confidence. Like an irresponsible teenager using one credit card to pay off another, more borrowing/spending only amplifies the problem.

    The U.S. has no plan to stabilize its current debt or stop the profligacy going forward; and is past the point of no return. We’re headed for unsustainable interest rates and higher (hyper?) inflation.

  2. Really enjoyed this. Thanks.

  3. Anonymous

    Digging ditches is a net drain on the economy only in the abstract. In reality it is the only feasible (socially acceptable) redistribution mechanism that supports the middle class. Anyone who fails to see that is not worth reading.

  4. Modern Monetary Theory. Look it up…

  5. Frantzesk Petrou

    Thanks Kevin, real gold as always

  6. Or maybe the “end game” is a nuclear exchange. That’d actually be very deflationary. Nobody is taking Putin seriously. Except some conspiracy theory nuts. What if once they’re not nuts. I dunno, just sayin. Cuz almost everyone is already expecting the “inflate away the debt” scenario and usually “everyone” is wrong.

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