I'll make a bold prediction: When the Americans attempt to depress the interest rates to (near) zero again in a bid to keep debt servicing managable, will be when the clock o the wall starts ticking loudly.

From there, there may be one shot left at keeping the US federal debt managable, and it's far too early to call what'll happen then - there will be either a return to some measure of monetary sanity (to curtail US military outlays) or a return to the monetary equivalent of IV morphine (continued cash injections to easy the fiscal pain), but no matter what route is taken, the world will look far different as a result of walking either of these parks.

In any case, I'm giving it twelve-fiveteen years, which may be optimistic given that we have a global real estate bubble that's teetering on the edge of bursting (Evergrande and now Country Garden defaults has sent the Chinese gigants into selloff mode in the West which together with the housing affordability crisis is close to sending the market into nosedive), and I have zero belief in the the US major banks have limited exposure to prevent a rerun of 2008, nor the audacity to come, hat in hand, to the treasury to ask for bailouts again, and that needs to be funded somehow.

Whatever the outcome, that all puts us somewhere around 2035-2038 before the house comes tumbling down, at least in the US.

#econ #macro #inflation