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Inflation Isn’t Going Away And Investors Own The Wrong Assets | Larry McDonald on “When Markets Speak”

Forward Guidance

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Financial Repression and Debt Jubilee as Solutions for High Debt

Throughout history, civilizations have implemented debt jubilees to eliminate debt, which involves a debt reset. Another method is financial repression, where interest rates are kept artificially low below inflation rates. In the current scenario, the US economy is facing a $35 trillion debt, with interest costs skyrocketing to $80 billion a month. To tackle this situation, the Federal Reserve might shift from quantitative tightening to quantitative easing quickly. Ultimately, the two ways to address the overwhelming debt are financial repression or a debt jubilee.

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