Its debt has already surpassed $36 trillion, and with high interest rates, paying it off is becoming a serious problem. This is not sustainable for much longer. That’s why they need interest rates to come down, and everything points to them already having a plan. Kevin Warsh, who sounds like a potential next Federal Reserve Chair, proposes that decisions about money should be made primarily with the goal of financing the government. If that happens, the change would be clear: - The Fed would stop focusing solely on inflation - The priority would be ensuring the government can pay its debt without issues - The central bank would serve the public accounts When this happens, the central bank no longer protects the currency; it protects the government. One idea on the table is to keep interest rates artificially low by massively buying government debt. The effect is simple: - More money is created - Each unit of money is worth less - The cost doesn’t disappear; it shifts to the people in the form of a loss of purchasing power. To justify this move, the most likely excuse will be an economic slowdown or the risk of deflation. With that argument, money would be printed to “stimulate” the economy and, at the same time, finance the government. Summary: They won’t let the system collapse. Investing has become a necessity rather than a choice. Although short-term markets can be unpredictable, for the future, the last thing you want is your money in fiat currencies.
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The United States is at a tricky point:
Its debt has already surpassed $36 trillion, and with high interest rates, paying it off is becoming a serious problem.
This is not sustainable for much longer.
That’s why they need interest rates to come down, and everything points to them already having a plan.
Kevin Warsh, who sounds like a potential next Federal Reserve Chair, proposes that decisions about money should be made primarily with the goal of financing the government.
If that happens, the change would be clear:
- The Fed would stop focusing solely on inflation
- The priority would be ensuring the government can pay its debt without issues
- The central bank would serve the public accounts
When this happens, the central bank no longer protects the currency; it protects the government.
One idea on the table is to keep interest rates artificially low by massively buying government debt.
The effect is simple:
- More money is created
- Each unit of money is worth less
- The cost doesn’t disappear; it shifts to the people in the form of a loss of purchasing power.
To justify this move, the most likely excuse will be an economic slowdown or the risk of deflation.
With that argument, money would be printed to “stimulate” the economy and, at the same time, finance the government.
Summary:
They won’t let the system collapse. Investing has become a necessity rather than a choice. Although short-term markets can be unpredictable, for the future, the last thing you want is your money in fiat currencies.