“I think (investments) that will most likely do best will be those
that do well when the value of money is being depreciated and domestic
and international conflicts are significant.”
Ray Dalio
We’ve Arrived At The End Of The Road
by Adam Taggart
When Richard Nixon closed the gold window in August 1971, fully
severing the US dollar from its gold standard, the Federal Reserve and
other world central banks found themselves liberated. No longer was
their ability to provide liquidity constrained by the physical
limitations of the gold supply.
The Fed started intervening more and more during times of slowing
growth to goose the economy back to vigor. Cheered and further egged on
by politicians happy for easy solutions and desperate to avoid having to
make tough calls, central banks have been increasingly willing to
provide liquidity in good times and bad.
Akin to removing the limit on a teenager’s credit card, with access
to so much cheap money, the US went on a debt bender. One that has
lasted for nearly half a century:
#OMG
Here we stand today with the national debt at over $22 trillion,
total US debt outstanding of $70 trillion (shown in the above chart),
and unfunded national liabilities of over $200 trillion. And we add to
this every year with an annual deficit now exceeding $1 trillion.
This gigantic accretion of debt will never be repaid. And as the pile
grows higher, the burden of servicing it — even at today’s historically
low interest rates — is placing an increasingly heavy drag on economic
growth.
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