Forward Guidance America’s Debt Spiral Is Accelerating | Weekly Roundup
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May 23, 2025 This week, the discussion dives into the alarming U.S. fiscal pivot and escalating deficits, sparking concerns for bond markets and Bitcoin. The hosts debate Japan's role as a potential harbinger of sovereign debt risks and the feasibility of quantitative easing amidst economic strain. They analyze the housing market crisis and explore why Bitcoin and foreign equities could be the smartest long-term investments. Generational divides in financial perspectives are also highlighted, contrasting Boomers with the emerging crypto-savvy crowd.
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U.S. Fiscal Pivot to Higher Deficits
- The U.S. is shifting towards running higher fiscal deficits with a focus on economic growth outpacing debt.
- This shift implies long-term losers among holders of U.S. treasuries on a real returns basis.
Debt Drives Consumption, Bitcoin Surges
- The economy relies heavily on debt-driven consumption without willingness to cut spending.
- Bitcoin and gold emerge as the only sustainable stores of value amid a fiat Ponzi scheme.
Capital Flight Signals New Regime
- U.S. stocks, bonds, and the dollar falling together signals capital leaving the U.S.
- Recent market behavior reflects a new macro regime, different from past asset crashes.