This is a weird video - kind of feels it was not finished. Maybe they didnt realise they were making a horror story. lol. What are we to conclude about a country that has a ballooning deficit funded by others? Might we conclude that either: 1. The US will have to print a lot of USD to repay debt (in USD) - debasing USD, causing a lot of asset inflation. Well we see this already. 2. The US will be forced to raise interest rates in order to increase US savings; politically unpalatable because of impact on asset prices 3. Other countries are going to have to subsidise US debt. Who? Not OPEC states with cuts in oil prices. Not Russia. Korea? Too small? 4. US could repudiate the debt. i.e. Take China to WTO, and complain about their mercantilism. Debt restructure tied in with new monetary system. Now, if the US is debasing their currency; does it become a race to the bottom. Is Japan and the EU destined to debase their curencies to keep their exports competitive? Am I missing something? Not a problem as long as people end the day with their wealth in tangible savings and not paper.
Posted on: Mon, 15 Dec 2014 21:46:04 +0000
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