Ray Dalio warns Fed’s hands are tied and higher U.S. inflation is sticking around. Democracy, maybe not.
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> The Fed’s hands are tied
The reason the fed’s hands are tied is because without constant stimulus, real estate prices and the stock market would collapse. And if those collapse, the whole economy will come tumbling down fast, with mass unemployement and USD instability.
The Fed, despite being nearly all powerful and defacto owning the US government outright, really doesnt have any choice: they have overspent, and over leveraged the economy. They have grown the government sector, and thus face large and constant drains on the US economy, which blunts the power of technology and productivity growth to make a recovery.
If they take their foot off the gas, they could lose control of all of it, and the US woud likely devolve into a civil war situation. If they keep their foot on the gas, printing money constantly, there is the risk that the climb of the debt ratio simply outpaces productivity growth, and a reset of some type becomes unavoidable.
And we all know what that reset looks like: War with China.
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