I know someone asked why does the national debt matter, it’s never mattered before. Well the answer is that it doesn’t matter as long as interest rates don’t rise. The problem is they will rise. We have begun all these qe, negative interest rate, stimulus checks, bailouts, alphabet soup programs all inflationary. They all reduce the dollar purchasing power over time which is why Gold is going up. Well the dollar has been strong in relation to other fiat currencies but this will change. They have not priced in everything we have done over the last 2 years we are about the same as when the fed was reducing their balance sheet and had interest rates at 2.25. The only fundamentally long term bullish thing the dollar has is that its the world reserve currency (which will change) and in the short run we have a liquidity crisis which is dollar bullish. Other fiat currencies have trade surplus’s and strong exports which makes their currency more valuable we have the largest trade deficits, US is the largest debtor nation which is bad news for dollar, US doesn’t own any assets all foreigners own our assets yet we consume all the goods they produce. Us has made the most promises that it can’t keep Social insecurity, Medicare, military, big government all going to cause dollar to fall. Our citizens do nothing but spend money and go into debt vs countries like Japan that save money and produce. Yes other countries are making the same mistakes as US but ours the greatest and we have the most to lose. Us national debt is about to go to 200% which is a problem because we will have to monetize all that debt putting downward pressure on the dollar. Foreigners and Us citizens will not want to buy our treasuries yielding negative interest rates so the fed will either have to allow interest rates to rise ( which we can’t afford) or monetize all debt putting more downward pressure on the dollar which will lead to hyperinflation once the debt bubble pops. We saw in other examples of hyperinflation once interest rates start to rise substantially that’s is only continues with more and more money printing.
