Debt Crisis Spiraling Out Of Control | Alasdair Macleod (Liberty and Finance)

Alasdair Macleod (https://alasdairmacleod.substack.com) discusses the imminent financial crisis stemming from the Western world's escalating government debt, which now exceeds levels seen during World War II. He highlights the dangerous debt trap where debt growth outpaces income growth, exacerbated by a lack of foreign investment and rising inflation. Macleod warns that the U.S. dollar is in a precarious position, with rising interest rates and a potential recession contributing to economic instability. He critiques the government's policies, particularly the approach to unrealized capital gains taxes, as a manifestation of the broader problem of currency devaluation. Macleod underscores that gold is maintaining its value amidst this turmoil, driven by global shifts away from fiat currencies and central banks' increasing gold reserves.



Alasdair raises the issue of the US dollar losing its value (other countries are dumping it for trading) which means higher interest rates -but their economy is tanking, which would mean lower rates (which the Fed has signaled). The lower rates mean imported goods, most importantly fuel, will be higher, which makes everything cost more. 

Note: It's impossible to predict when a collapse will occur, but it might be a slow spiral down as the Fed just keeps printing money. One must also remember that there is still a real economy, separate from this macro finance stuff, holding things up, and there are outside partners in world finance (the Bank of Japan, ECB etc) that can rig prices to stave off dramatic currency devaluations etc. They're already keeping a lid on Gold price rises, but not doing very well.

[Posted at the SpookyWeather2 blog, September 3, 2024.]