It's going to be really interesting over the next 5 years, a lot of Western countries have been relying on debt to a dramatically unhealthy degree, apparently under the idea that rates can never rise.
With rates rising, debt maintenance costs are going to become significant, and a lot of basic services are going to have to get pared back since going deeper into debt is not going to stay an option. As long as inflation remains a potential issue, there's a very real risk of bonds going no-bid.
It means a lot of things people have taken for granted are going to go away.
Because these things move so slowly, people have assumed that because we have had monetary and fiscal policy behave in a certain way since the 2001 recession and dramatically increase at the 2008 recession, that can never change. problem is that things can change, and when they do you enter a new era that completely changes the assumptions, and you enter this new era with all the excellent work and all of the mistakes that you took with you from the last.
With rates rising, debt maintenance costs are going to become significant, and a lot of basic services are going to have to get pared back since going deeper into debt is not going to stay an option. As long as inflation remains a potential issue, there's a very real risk of bonds going no-bid.
It means a lot of things people have taken for granted are going to go away.
Because these things move so slowly, people have assumed that because we have had monetary and fiscal policy behave in a certain way since the 2001 recession and dramatically increase at the 2008 recession, that can never change. problem is that things can change, and when they do you enter a new era that completely changes the assumptions, and you enter this new era with all the excellent work and all of the mistakes that you took with you from the last.
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They haven't, and they won't.
Unfortunately, responsible policymaking would have prevented almost all of this, but we haven't had that for a long time. Good governance is boring, so it doesn't get votes.
Unfortunately, responsible policymaking would have prevented almost all of this, but we haven't had that for a long time. Good governance is boring, so it doesn't get votes.