In this episode, Nik breaks down the massive fiscal deficits of the US government over the past five years. We begin with comparing today's deficit historically, explain the numbers behind how the US has spent $10 trillion more than it has collected since 2020, and how this deficit has impacted financial markets and the economy. Nik discusses bitcoin's price increase to $70,000, the signal we are getting from realized price, and generally speaks to what we missed last year when forecasting a recession.
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Have you been too bearish on the economy, expecting a recession to be right around every corner for the past couple of years? It’s ok to admit it—a year ago, when banks began failing, I couldn’t have imagined no recession would set in by now. In fact, I thought it was beginning at that moment. Over the past several months, however, it has become clear that the resilient US economy is instead super-extra-persistently resilient, and the reason is fiscal spending. Last year, readers insisted we read up on the 1940s and start admitting that restrictive interest rates are playing secondary to deficit spending.
As a researcher, I also admit to you today that I’ve been reading a healthy amount of financial research papers, listening to interviews with monetary experts, and overall sinking deeper into learning mode. Thankfully, I have an incredible data tool that allows me to convert my research into visualizations for you, the reader—today, we share updated views on fiscal dominance, inflation, and the monetary system, courtesy of a writer who is frankly just obsessed with trying to figure it out. Aren’t we all?