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Left unasked: Why has the US government chosen to effectively keep its young people in student debt slavery to the tune of $1.5 trillion?
US political shifts are increasing the odds of a "bond fire".
#DebtJubilee #Gold #BTC
https://twitter.com/SenWarren/status/1326903357135605762
US political shifts are increasing the odds of a "bond fire".
#DebtJubilee #Gold #BTC
https://twitter.com/SenWarren/status/1326903357135605762
2/ If I was tasked with ensuring the US suffered from "secular stagnation" as described by @LHSummers, one of the first things I would do would be to load up my young people with $1.5 trillion in non-dischargeable student debt.
3/ Then, I would follow trade and economic policies (outsource mfg but allow the proceeds to accrue solely to the 1% instead of reinvesting some of proceeds in education, infrastr, & job retraining) that saw the majority of wealth accrue in the hands of old people w/a low MPC.
4/ MPC = Marginal Propensity to Consume
5/ The combination of highly-indebted college debt slave young people and wealthy old people with a low MPC would go a long way in ensuring the US suffered from "secular stagnation" and lost the new "Great Power Competition" v. China.
6/ What is left unsaid is that these choices were made in service to the bond market, so that the US government can continue to borrow cheaply [to fund some good ideas and some really bad ideas (i.e., 2001-present Mideast policy)].
7/ This was all fine until the "secular stagnation" began hurting the US govt's ability to win the newly-declared "Great Power Competition" v. China.
We must choose the bond market (on a real basis) or winning v. China. The old arrangement is a threat to US national security.
We must choose the bond market (on a real basis) or winning v. China. The old arrangement is a threat to US national security.
8/ To win v. China, the US economy must resume the long-term dynamism it was once known for. Doing this requires much higher levels of nominal GDP growth, without a commensurate rise in bond yields. In plain English, winning v. China requires a "bond fire"** (on a real basis).
9/ **credit to David Zervos for the term "bond fire" to describe a concept we've long written about at FFTT.
10/ Paradoxically, this means that for the 1st time in 40+ yrs, a bet on bonds is effectively a bet AGAINST the USA winning the "Great Power Competition" v. China, while buying gold is a bet on the USA winning.
We would not bet against the USA. /End.
http://FFTT-LLC.com
We would not bet against the USA. /End.
http://FFTT-LLC.com
