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1/ Western social democracies wrote the biggest healthcare, disability, & long-term care policy in the history of the world.
Except they did so effectively unreserved and without any underwriting standards, & with no ability to change pricing or force lifestyle modifications.
Except they did so effectively unreserved and without any underwriting standards, & with no ability to change pricing or force lifestyle modifications.
2/ Early on, this forced a boom in consumption globally, as people knew the state would care for them. But now these unreserved policies are coming due, and the only capital available to fund them are from Central Banks.
3/ This was like AIG writing subprime mortgage insurance for the big banks in 2005-08, except western governments did this to the tune of hundreds of trillions of dollars, not the quaint tens of billions of dollars like when AIG pulled the same stunt.
4/ Adding to the circular logic, the debt of the governments guaranteeing hundreds of trillions in Entitlements has been installed by fiat regulation as the "risk free asset" underpinning the banking system & indeed, the pricing of all assets.
5/ They say "It's never different this time", and we suspect it isn't this time either. The Central Banks will have to bail out western social democracies just like they had to bail out AIG.
6/ Fiscal stimulus? $908B is for pikers. FDR, LBJ, & George W. Bush promised $100-200T in "fiscal stimulus". These promises can't be cut without the economy collapsing.
7/ Additionally, because of the way policymakers handled 2008 bailouts, these promises likely cannot be cut without political and social unrest.
Let's watch.
http://FFTT-LLC.com
Let's watch.
http://FFTT-LLC.com
