If the deficits are not monetized then they are added to the debt. While this does not add to the current inflation pressures, at what point and how will this affect our monetary balance? Inflation historically has been a seductive solution to excess debt.
Read MoreWhen the vaccine is implemented and the pandemic is behind us, there will a powerhouse of pent up demand that will propel a booming recovery. Tax revenues will grow accordingly even without a tax rate increase, but there is a downside.
Read MoreIt seems that this can go on indefinitely because we cannot envision the central banks losing control of interest rates, but absence of evidence is not evidence of absence. Believers in Modern Monetary Theory mistake this trend for a true principle. Central banks will remain active in controlling interest rates because the debt is so large that any spike in interest rates would be disastrous. We are stimulating a zombie economy reliant on low interest rates provided by a central government even more dependent on low interest rates.
Read MoreThe tariffs and the growing debt are threats, but bull markets do not require perfection. They just require sound fundamentals and a dearth of alternative investments.
Read MoreFrom John Mauldin in his blog, Mauldin Economics, Where is the Growth? Yes, shrinking workforces, private-sector debt overhangs, and technological innovation are making it difficult to achieve “financially stable growth with full employment” (quoting Summers); but governments and central banks are
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