Fiscal incontinence

An interesting term from an article on our over spending governments:

The party’s over people

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Can free markets rein in politicians?

The Captain

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Yep, it has already happened here in the UK:


Totally wrong question.

The question is can we after supply-side economics reindustrialize?

The only stats that matter on the debt are the debt to GDP ratio.

Pretending that we can cut spending while not retooling won’t work. Pretending most people should be SOL so that a few people can feel as if they are more important won’t work either.

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This man saw it back in 2010:

James Carville, President Clinton’s former top advisor, famously said: “I used to think if there was reincarnation, I wanted to come back as the President or the Pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everyone.”

You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.
(Abraham Lincoln)

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^ That was great example of how fantastically dumb the smart money can be. It was dated January 2010. At that time, the 10-year was at almost 4%. Of course, rates continued to fall for the next decade until they reached near zero.

The NAV of bond funds rises when interest rates fall. A decade of falling interest rates is a dream come true for bond fund investors. Yet these idiots were sitting on cash earning nothing while everyone else was getting rich.

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In 2024 the USA will need to refinance $7.6 trillion in treasuries:

Add to this a 2023 deficit approaching $3 trillion that will need financing.

China, Japan and quite a few others are dumping US Treasuries:

All this new and existing debt will need to be refinanced at much higher interest rates, probably up from $1 trillion to $1.5 trillion

I think that USA may soon have a financial reality check