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To: ajtj99 who wrote (2142)	8/28/2021 4:14:33 PM
From: Sun Tzu	2 Recommendations Recommended By Lee Lichterman III robert b furman Read Replies (1) \| Respond to of 10493

They don't have a choice. Almost 10 years ago Dalio published an analytical framework for the big debt cycle and everything has happened as he predicted. Suppose that the Fed decides to make the real rates match the historical median in recovery cycles. Not the median for fighting inflation. Just the median for recovery. That would be what? 2% real rates? 1% real rates? How about 0.5% real rates? Is that possible? A 0.5% real rates would push notional rates to over 4%. Forget about the economy, what do you think that would do to the government budget? Do the math. With $30T in debt, every 1% increase in interest rates adds $300B to government expenses. Paying zero real interest will add $1T to the expenses. So no. The Fed funds rate is not going to be above the inflation for at least 10 years. And by then the USD won't be the reserve currency. All the talk of defending the currency or fighting inflation is just jawboning to prolong jig. The Fed cannot raise the rates in a meaningful way even if they wanted to. This does not mean that they will not raise the rates or vary their market operations to prevent a crash. They are like a pilot whose engines are on fire and the only choice is to conduct an emergency crash landing. The plane is going down one way or another. The pilot just hopes for a controlled landing rather than a nosedive. No reserve currency has ever survived the big debt cycle. Just as we have 5 and 10 year business and commodity cycles. There are also cycles that are larger than a person's lifespan. Few people get them because nobody gets to experience them and live to talk about it. Consider yourself special. In your lifetime you have gotten to experience a number of events that happen less often than a lifetime. Some, like the alignment of all the planets, were of little consequence. Others, like the alignment of all market forces, are just as spectacular to witness and will shape the next century.

To: ajtj99 who wrote (2142)	9/28/2021 11:39:29 PM
From: Sun Tzu	1 Recommendation Recommended By ajtj99 Read Replies (1) \| Respond to of 10493

The question isn’t whether the US is going to default on its debt or not; Hirshmann Capital showed last year that since 1800, 51 of 52 nations (98%) that hit 130% debt/GDP like the US have defaulted on their debt. The question is whether we’ll default via inflation or deflation. The question isn’t whether the US is going to default on its debt or not; Hirshmann Capital showed last year that since 1800, 51 of 52 nations (98%) that hit 130% debt/GDP like the US have defaulted on their debt. The question is whether we’ll default via inflation or deflation. pic.twitter.com/lSgkYhwFbv — Luke Gromen (@LukeGromen) September 28, 2021