/biz/ - Business & Finance

>>55783847
Brother, if you don't mind, darling.

>>54659496
My chest

>>51632858
I think the Milkshake Man too readily dismisses a couple of factors. One is that other countries are not just going to sit still. China has a pile of three trillion USD and it isn't pouring them into US bonds anymore. That means the US will have to borrow new money from the Fed to pay for what it used to use Chinese dollars for AND China will escalate its purchases of hard assets including land in the USA as prices drop. Even Japan has now decided it can't let the Yen fall anymore and is going to start cashing in its US bonds to buy Yen. That is a pretty big step for Japan, as dominated by US policy as it is.

Perhaps more importantly is the US debt. The cost of servicing US debt has been steadily inching towards the point where it exceeds all Federal revenue. As interest rates increase, the debt service increases and a deep recession will cause Federal revenue to tank. The US government cannot allow debt service to exceed revenue and it will not be able to raise taxes due to Laffer limits as well as political pressure. The US will have no choice but to borrow more money into existence from the Fed. The dance between recession, interest rates, and inflation will become more and more frenzied until the dollar breaks.
bonds