EP, I figure <<net debt>>, meaning debt less cash, is a flawed concept, because:
Jay borrows USD 10 billion, shows cash USD 9 billion (net of first year interest expense, given Jay's credit rating), and may earn 4.5% on said cash, or 410 million, leading to net down USD 590 million, spends whatever on war, say 100 million, net down ..., spends on whatever else ...
Now, starting next year, borrows another 10 billion, net down ...
The GDP resultant from debt financed spending gets less robust with each injection of debt drug, weighed down by interest, and trimmed by inflation. Result, Green Dollar Down, as is happening now.
etc
... compounded, and yet, at any given time, net cash looks OK, just less OK with each passing minute.
Compounding is wonderful when it works for us, and terrible when against us, as all reasonable folks can agree.
We already agreed that at some point Dell may bite the bullet or kick the can, etc.
All of the above is premised on the historical truth that fiat money inflation ends in something biblical, without exception.
As to GDP is better whenever higher, it is also a flawed concept.
Chugs, J |
