When one takes into consideration the ballooning federal debt and the runaway interest expenses associated with that debt coupled with the increased cost of capital to invest in critical infrastructure that is necessary to bring more goods to market, it is easy to see a future in which the Fed successfully induces demand destruction but does very little to solve the inflation problem, and actually exacerbates it.
Discussion
Totally agree with this. The persistent price inflation we are experiencing is the result of decades of monetary information finally being shifted from financial assets to real goods, and commodity prices will only go HIGHER when the companies that actually make things go under due to exorbitant financing costs.
*inflation not information.
Great article from #[0]:
If this scenario does come to fruition, Lyn cautions that the Fed will become a hyper-politicized institution and calls for it to be more tightly managed by the government will grow. At this point, it will be all but over for any semblance of autonomy for the Federal Reserve and likely the dying breath of the US Dollar as the reserve currency of the world.
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#plebchain
#bitcoin
Thanks….missed this one for some reason.
Just read your final thought from 2 days ago about taking out the trash at 11pm the night before. Well, I'm a "hasn't paid for trash service in a few decades kinda guy" cuz I'm too cheap, and I just run it to the dump myself.
TL:DR
Marty had to fly in a middle seat.
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Marty great note and apologies I haven’t gotten to listen to the pod yet - did you guys happen to discuss what level you think the fed funds rate can get too before the interest on debt becomes impossible to pay? My gut is we are getting close but figured I would ask if anyone has done any real calculations on it. Ty 🤙🏼
Does anyone know a good book about what the commoner was experiencing and thinking during the Weimar melt up or meltdown however you phrase it ?
I don’t have any books that I can recommend on the topic off the top of my head. However I do remember reading something on it several years ago. And what this essay described was that people living in the Weimar Republic initially felt “paper wealthy” and sold assets to accumulate more paper. Then they got rugged as hyperinflation occurred and foreigners were able to step in and buy up swaths of property and other assets at fire sale prices.
But the tldr is: they felt paper rich on the run up, sold off assets to increase their paper wealth and then got rugged by hyperinflation.
Episode drops Friday morning. And we did bring this topic up but I don’t think Lyn mentioned a specific rate.
This is pretty crazy: Marty Bent on J. Powell's strategy: "Sitting in front of the American people and telling them that the end goal of your policy is to destroy enough jobs to make it so there are less people with enough money to compete for goods and services throughout the economy would be career suicide."
"Demand Destruction"
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27 years later and nothing's changed, except one big thing. We have Bitcoin now.
Otherwise, the similarities are eerie. https://www.youtube.com/watch?v=MRuS3dxKK9U&t=69