SubscribeBalooning Deficits…But Who Cares?
In the first 16 days of the new fiscal year the U.S.’ national debt grew by $300 billion. That’s a growth rate of 75% and equates to a debt load of $17 trillion by this time next year. But, as the title of this post states, who cares?…
…definitely not U.S. regulators. You see, it’s very simple. With the greatest creation of money and credit ever seen in the U.S. underway, our fiscal balance becomes irrelevant to those who continue to put our nation further in the red.
The debt must be looked at in real terms not nominal, and we must remember that in order to prevent deflation that would dwarf the great depression, we must hyper-reflate.
Put it this way, it doesn’t matter if we balloon our national deficit to $100 trillion or more. If we increase our deficit by 1,000%, and at the same time increase our money/credit base by 10,000%, we actually reduce the purchasing power of the nominal value of our deficit. Just imagine in relative terms what it will mean when you add a couple of zeroes on the end of all the basic goods and services we use.
This post essentially piggy backs the piece John wrote regarding long dated U.S. treasuries. It’s just one more reason to consider shorting these worthless pieces of paper.
Nick Jones
The Real Deal
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