FBXL Social

Thinking about it, I think we hit dozens of sovereign debt crises before they get inflation in check. The problem is that they've been so irresponsible around the world for so long, but they've driven themselves into this corner. Assuming for the sake of argument that they don't start applying financial stimulus during inflation because they don't want to be seen as fuelling inflation despite the recession we're probably already in in lots of economies around the world, the next stop will have to be a bunch of sovereign debt crises because there's just so much debt you can't afford to raise the cost of that debt without ending up in a situation where you just can't drop enough debt to keep up.

This isn't really a new prediction for me, I was saying this before the pandemic that you can't live off of get fueled government spending forever. Eventually, you spend so much money that you start having to cut those same services because you're spending all of your money paying back your bond holders.

Exactly.

The greatest hypocrisy is that the same people who want to lecture us all on climate change using the exact same logic, except that running up debt at the rate we're doing it will inevitably lead to doom within a generation.