Watch what happens. The Fed's attempts to constrain credit will trigger a deflationary collapse (probably already the case) after which it will respond with higher, and accelerating, rates of monetary debasement. Short nominal rates having been pushed to zero the avoid hangovers stay drunk strategy is over. Decades of monetary and fis…
Watch what happens. The Fed's attempts to constrain credit will trigger a deflationary collapse (probably already the case) after which it will respond with higher, and accelerating, rates of monetary debasement. Short nominal rates having been pushed to zero the avoid hangovers stay drunk strategy is over. Decades of monetary and fiscal distortion must now be wrung from the system through either inflationary collapse (easy bet) or deflationary collapse. Happy endings never follow such distortions, and those extant are extreme by historic standards. Doubt it? Just study financial history.
The US dollar is already essentially digital. No printing is required to debase the IOUnothing fiat we call the dollar. New dollars are created through nothing more than accounting entries at the Fed and within the financial system. A true digital currency will make it easier for the government to track and control your financial activity but it won't do anything to address monetary and fiscal distortions which are going to lead to a secular financial collapse; now likely imminent. There is zero reason to expect a happy ending given current conditions.
Perhaps not but renaming the unit of account and making it wholly digital won't do anything to resolve decades of monetary and fiscal distortion. If there were a transition to a true digital currency then it would be debased at an accelerating rate to avoid deflationary collapse, resulting in inflationary collapse of the new unit of account.
That would be why it would have to be attached to a social credit scheme. Low scorers would have large fractions of their assets liquidated, which would keep the rest of the economy stable.
Authoritarian nut-job dictators have the lowest social credit scores imo. I wish that people under their spell (e.g., Chinese, etc.) would effectively and cleverly "fight" back, but I guess they are too oppressed to even come up with organized plans to do so, anymore, or else when they do, it doesn't ever work. Americans must Resist the Great Reset with everything we have got in us. Second amendment must be defended for as long as the country endures, even by people who don't necessarily want to own weapons or use such. People in countries without that human right protectively intact appear to always fall under utterly corrupt oligarchies.
We've seen interim financial cycles which bounce in a few years. The inbound financial collapse will be secular in nature; a very different beast requiring 30 years, give or take, for recovery if history is any guide. Again look at the history. Deflate the S&P 500 through the secular collapse of the 70's and you'll see the peak was in 1968, bottom almost 70% lower in 1982 and recovery to the 68 level in 1994. But you weren't actually back to even, 26 years later, because you then had a capital gains tax liability on the phantom 300% nominal gain. And the 1970's secular collapse was moderate by historic standards. This secular collapse is not going to be moderate. BTW, performance of bonds was even worse.
Watch what happens. The Fed's attempts to constrain credit will trigger a deflationary collapse (probably already the case) after which it will respond with higher, and accelerating, rates of monetary debasement. Short nominal rates having been pushed to zero the avoid hangovers stay drunk strategy is over. Decades of monetary and fiscal distortion must now be wrung from the system through either inflationary collapse (easy bet) or deflationary collapse. Happy endings never follow such distortions, and those extant are extreme by historic standards. Doubt it? Just study financial history.
Perfect time for them to rapidly develop a central bank digital currency....
The US dollar is already essentially digital. No printing is required to debase the IOUnothing fiat we call the dollar. New dollars are created through nothing more than accounting entries at the Fed and within the financial system. A true digital currency will make it easier for the government to track and control your financial activity but it won't do anything to address monetary and fiscal distortions which are going to lead to a secular financial collapse; now likely imminent. There is zero reason to expect a happy ending given current conditions.
Don't assume the CBDC will be denominated in "USD".
Perhaps not but renaming the unit of account and making it wholly digital won't do anything to resolve decades of monetary and fiscal distortion. If there were a transition to a true digital currency then it would be debased at an accelerating rate to avoid deflationary collapse, resulting in inflationary collapse of the new unit of account.
That would be why it would have to be attached to a social credit scheme. Low scorers would have large fractions of their assets liquidated, which would keep the rest of the economy stable.
Authoritarian nut-job dictators have the lowest social credit scores imo. I wish that people under their spell (e.g., Chinese, etc.) would effectively and cleverly "fight" back, but I guess they are too oppressed to even come up with organized plans to do so, anymore, or else when they do, it doesn't ever work. Americans must Resist the Great Reset with everything we have got in us. Second amendment must be defended for as long as the country endures, even by people who don't necessarily want to own weapons or use such. People in countries without that human right protectively intact appear to always fall under utterly corrupt oligarchies.
You say this like it hasn't been happening for the last 15 years :)
We've seen interim financial cycles which bounce in a few years. The inbound financial collapse will be secular in nature; a very different beast requiring 30 years, give or take, for recovery if history is any guide. Again look at the history. Deflate the S&P 500 through the secular collapse of the 70's and you'll see the peak was in 1968, bottom almost 70% lower in 1982 and recovery to the 68 level in 1994. But you weren't actually back to even, 26 years later, because you then had a capital gains tax liability on the phantom 300% nominal gain. And the 1970's secular collapse was moderate by historic standards. This secular collapse is not going to be moderate. BTW, performance of bonds was even worse.