Since the 2008 bust the Fed and politicians have been doing everything they can to keep the stock market going up and the result is an astounding federal deficit. I can only think that this will compound a financial reset, we can only print so much money (can't remember the name of the GDP/deficit chart but 130 percent is the point at which governments get into trouble and we're at 122 percent ).
I agree that the intervention only makes the return to equilibuim harsher. And yeah, actually 50/51 countries who have gone above 130% have defaulted. The only one who hasn't is Japan, and you could argue that the US is helping them stay afloat. We are at 122% right now (higher than previous record during WWII) and over 100% typically means financial repression (bonds/cash devalued) gets worse and that's exactly what we've seen. Lyn Alden has a good article on it too.
Since the 2008 bust the Fed and politicians have been doing everything they can to keep the stock market going up and the result is an astounding federal deficit. I can only think that this will compound a financial reset, we can only print so much money (can't remember the name of the GDP/deficit chart but 130 percent is the point at which governments get into trouble and we're at 122 percent ).
I agree that the intervention only makes the return to equilibuim harsher. And yeah, actually 50/51 countries who have gone above 130% have defaulted. The only one who hasn't is Japan, and you could argue that the US is helping them stay afloat. We are at 122% right now (higher than previous record during WWII) and over 100% typically means financial repression (bonds/cash devalued) gets worse and that's exactly what we've seen. Lyn Alden has a good article on it too.
https://www.lynalden.com/does-the-national-debt-matter/