They're not going to hike rates much. They literally can't hike them enough to control inflation. You have to get interest rates ahead of inflation and if interest rates were at 8% the United States government would be bankrupt. I don't mean "ha ha" bankrupt and they have to run a deficit, I mean real bankrupt like even if every cent collected in taxes went to pay interest on the national debt there still isn't enough money. And that leaves $0 for defense or anything else. It's real bankruptcy.
“Force majeure” is the term I’ve been seeing the last few days.
On the flipside, real interest is nominal interest minus inflation. So we have negative negative real interest right now. That explains why assets have exploded. Borrowing literally earns money. This causes inflation. But printing more money to service the debt at 8% causes inflation too. This is a catch 22.
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