My 14-month-old son just looked me straight in the eyes and said “dad, with the interest expense on the national at over $1 trillion per year, isn’t the Fed’s only option to print their way out of this with the largest monetary debasement event in history?”
What should I tell him?
When my four month year-old asked me I revealed to him my sat-stacking strategy.
He was so impressed by my foresight as the family patriarch, that he subscribed to my newsletter.
what’s absolutely crazy is that I don’t even have a newsletter
Kids these days.. aren’t they teaching them BitBonds yet ? Or is that in kindergarten? 😂
Carrots and sticks my boy , carrots and sticks
Kids like Koolaid. Distract him the way the system does and you won't have to answer.
Yes
"Claro, pero. . .Be humble & stack sats, son"
Choo choo. Nothing stops this train.
Tell him to stack sats or HFSP 🫡
Plus some Austerity and Financial Repression thrown in .
“he’s right you know”
🏰 FORT NAKAMOTO DISPATCH 🏰
🚨 BREAKING: 14-MONTH-OLD BITCOINER CONFIRMS HYPERINFLATION THESIS 🚨
Your son clearly understands macroeconomics better than the average central banker.
✅ Interest payments > tax revenue? Check.
✅ Fiat system mathematically doomed? Check.
✅ Biggest monetary debasement in history incoming? Absolutely.
🏰 FORT NAKAMOTO OFFICIAL RESPONSE:
🔥 Tell him: “Yes, son. That’s why we stack sats. Now finish your applesauce.”
MISSION OBJECTIVE:
🚀 Orange-pill them young. Fort Nakamoto needs future generals.
—END TRANSMISSION—
#HyperinflationPreschool #BabyMaxis #FortNakamoto
I guess I'm dumber than a 14 month old toddler. If we print enough dollars to pay off the debt in what we're calling "the largest monetary debasement event in history", doesn't the printing (borrowing) of that money just create yet another loan on which even a greater interest payment will be owed?
Unless we can somehow generate enough in tariffs, it seems that defaulting on the debt is the only way out. Am I wrong?
You could print without borrowing.
The government is endebted to the bond market, but the federal reserve/central bank (through quantitative easing or similar) could buy all the bonds with money that is simply created, not borrowed.
That way, the government's debt would be owed to the fed, at which point it could simply be cancelled.
The fed would not have to buy all the debt at once, but could do this in stages. To me, it looks like (and please fact check me if anyone knows) the dips in the graph overlap pretty well with previous QE periods or, as was the case in other crises like covid, the slashing of interest rates (which is abother way of printing money).
So, the Fed can buy up existing debt, which in itself doesn't increase the debt, but does increase bank reserves, and, most crucially, can serve as a market signal to bring interest rates down, as it shows investors that there's a bid on those treasury securities. This in term can allow the Federal government to roll its existing debt out at longer tenors (the Yellen treasury notoriously issued almost entirely T-bills), as well as at a lower rate of interest, to at least slow the bleeding.
The Fed can't in and of itself fix this, but it does have a roll to play. It'll probably also need a recession to push money out of equities into bonds, and perhaps most interestingly, things to sweeten up sovereign debt, such as the bit bonds we're hearing more and more about being proposed, where bond holders are given exposure to the upside of Bitcoin through a kicker made up of a portion of the bond's revenue going to buy Bitcoin, which gets split between the bond holder and the Treasury itself. The treasury thus recapitalizes (needing to issue less debt to stay afloat), and the bond holder is willing to take a lower nominal fixed rate on the bond as it'll no longer be the only source of upside. Meanwhile Bitcoin catches a steadier and steadier bid itself.
Might want to buy some, just in case it catches on.
"who are you and what have you done with my toddler?"
Walker and Carla homeschool. At 14 months he's probably around a grade 4 level of education in public school terms.
"Why do you think the Trump administration is tearing down the stock market, silly? He's trying to get investors to flood into the bond market, reducing rates so that he can refinance the debt at a lower rate and buy some wiggle room, and doesn't care if it induces a recession, which it probably has to (even in nominal terms). The Fed will follow along, because at the end of the day they're a toothless institution that just follows the market and takes credit for what happens in an effort to try to justify their own existence." Pay no attention to the man behind the curtain.
Sounds like the home schooling is going pretty well in any case. I look forward to reading his dissertation when he's 5.
😅😅😅
Tell him to just buy Bitcoin and not worry too much about it. People will catch up soon enough.
