Congratulations to Everyone Involved
This week we solidify the future of the US: 9-10% deficits forever, minimum, during peacetime. We will be in the teens when a recession or macro calamity next hits. What comes after that is yield curve control, a slow devaluation of the dollar, and the mother of all risk asset bull markets.
We have assembled the all star team of politicians and technologists to trim the deficit and we are now in the “everyone knows that everyone knows” phase of the experiment. There is simply no political will to cut entitlement programs, which are the drivers of the deficit. If Trump and Elon cannot get it done, no one can - there is truly no stopping this train and we will now accelerate towards the endgame scenario.
I truly believe the world is healing due to Donald Trump, and he can do unbelievable things with foreign and domestic policy, but the mountain of debt here is insurmountable, the hole is too large to climb out of. As currency growth expands P/Es will naturally trend towards infinity, making assets more valuable - but a 20-30% drop in the dollar against real assets will make large portions of the country dramatically poorer. Ben Bernanke is effectively a war criminal in this light, and I do not expect history to be kind to him.
The root problem with conventional currency is all the trust that’s required to make it work. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. Politicians must be trusted to be prudent with our tax dollars, but they are unable to see beyond partisanship momentum. A lot of people automatically dismiss e-currency as a lost cause because of all the coins that in the past few years - I hope it’s obvious it was only the centrally controlled nature of those systems that doomed them.