Meta Econ Takeover Day 46
1677 sats \ 5 comments \ @Undisciplined 1 Dec 2023 meta
How is the US Treasury going to get out of this situation? They can't afford to service the debt at these interest rates, but they need to increase rates further if they want anyone other than the Fed to buy the new bonds.
As the US Treasury Runs Out of Creditors, Its Options Dwindle By Jonathan Newman "With US government debt skyrocketing past $33 trillion and possible recession looming, the Treasury faces the prospect of running out of suckers. Finding buyers for US debt will become much more difficult."
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743 sats \ 1 reply \ @grayruby 1 Dec 2023
The Fed is the biggest sucker at the table. Only problem is they run the casino.
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100 sats \ 0 replies \ @Undisciplined OP 1 Dec 2023
Lol. I think that actually makes everyone who's legally required to use dollars, including those whose currency is pegged to it, the biggest suckers.
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0 sats \ 0 replies \ @Undisciplined OP 1 Dec 2023
The Fed has nowhere near the level of understanding that it's advocates (and many of its opponents) claim. Like all institutions of central planning, the Fed faces insurmountable knowledge problems.
It’s Time to Bust the Myth of Fed Omnipotence By Jon Wolfenbarger "One of the biggest and most pervasive myths in modern-day economics is the myth of the omnipotence of the Federal Reserve."
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0 sats \ 0 replies \ @Undisciplined OP 1 Dec 2023
Here's an interview with the author by Bob Murphy:
The Treasury is Running Out of Creditors "The US Government will face another round of federal debt expansion in 2024, but will there be enough creditors to allow their continued spending? Investors are not buying Treasury Debt at forecasted rates, foreign investors are exiting federal debt, and even the Federal Reserve is reducing its treasury holdings.
Dr. Jonathan Newman recently wrote for the Mises Wire on this topic, and he joins Bob to break down the data and explain what is up with treasuries and the future of the dollar."
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0 sats \ 0 replies \ @Undisciplined OP 1 Dec 2023
Relatedly, here's a more theoretical argument about why inflation expectations can't actually cause price inflation:
Inflationary Expectations Do Not Cause Inflation By Frank Shostak "According to mainstream economists, the expectation of inflation leads to higher prices. That is impossible, however, because actual inflation involves real increases in the money supply."
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