Debt, Inflation, & Welfare Queens
It's coming up, it's coming up, it's coming up
It's dare!
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The FT has a big piece on debt - The mounting pressure on bond markets. Is it worth reading? Well, not in any way to understand debt in the 21st century, but it is ever more vigorous flag waving from the financial world, the former masters of the universe, now replaced by our Tech Overlords, that debt is out of control.
It’s a curious question about what this set this off. The "debt is a problem" mantra has slowly been rising over the last year in the financial press. What’s that line about bankruptcy, slowly and then all at once? Nonetheless, debt as problem was taken off the table since at least 08, when the zone had to be flooded for ballast to keep the whole global financial ship from tanking.
But you can go back further, to blood lusting Dick Cheney’s infamous economic insight a few years before that “Reagan proved debt didn’t matter.” A comically brutal assault on the Reagan Revolution, after all, inflation had elected our first actor president and we all learned from University of Chicago Professor Milton Friedman's, Freedom From Choice, inflation is always and everywhere a government spending problem.
It was only Mr. Bill that took it all seriously. With his great capitulation, he cared enough to manipulate the books to feign a surplus. In 1995, US government debt was $4 trillion, now its $36 trillion. I tell you brothers and sisters, there wasn’t an economist in 1995 – left, right, center – who told where the debt would be today would conclude anything but that there'd be massive hyper-inflation. I mean, what would Professor Friedman say?
So, in the last couple years, we had a little what I like to call Biden Inflation. But there’s been even more across the world, for example the Japanese have managed to conjure inflation for the first time in three decades. However, federal governments' debt haven't been the only debt to grow over the last three decades, corporate, consumer, and local government debt all experienced the same trajectory.
One question and there's never been a clear answer, lord I miss Greider sometimes, but in a bank debt money system, how exactly is debt accounted? I suppose in this day and age, the real question is how is anything accounted? One thing for certain, Donald Trump cares not one comma about debt, in fact it's been key to his "wealth." Elon found this out about his president in the last couple weeks. Outside being an accomplished "a car assembler" in the 21st century, Elon ain't a particularly astute fellow. Most ironically, paraphrasing the words of President Reagan, Elon’s the biggest Tesla driving welfare queen there is.
Anyway, the entire global financial house of cards built over the last four decades sits upon a foundation of leveraged upon leveraged debt. So, remember that first and foremost when anyone talks about the need for less debt. Count me in.
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