Forward Guidance All Roads Lead To Debasement | Weekly Roundup
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Jul 4, 2025 This discussion delves into surprising labor market data and the hidden impacts of immigration on the workforce. The hosts critique both political parties for their failures while exploring the looming deficit and its implications. They highlight the U.S. shifting towards 'EM-ification' and the challenges of inequality. Currency debasement is framed as inevitable, raising questions about the future of the dollar. With insights into market volatility and government policy effects, the conversation captures a complex economic landscape.
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Immigration's Impact on Labor Market
- Changes in immigration flow largely explain recent labor force fluctuations and unemployment rate trends.
- Reduced immigration decreases labor force size, mechanically lowering the unemployment rate despite economic slowing.
Inflation Fight Driven by Immigration
- Fighting inflation mainly succeeded through massive immigration rather than Fed rate hikes.
- Current policy struggles to balance wage growth with inflation control, causing political and economic tension.
Controlled Demolition via Negative Yields
- The new economic strategy relies on negative real yields with nominal growth outpacing debt.
- This approach deleverages the economy by inflating GDP rather than cutting deficits.