← Back to context

Comment by WalterBright

8 days ago

> just about to end its fight with inflation

Inflation will decline only when the deficit declines.

If there is a deficit at all. Looking at the monetary flows it seems most of the deficit outflows where just flowing back into the US through the stock market.

  • Interest is paid on the deficit, and once the interest gets large enough, there's a runaway doom loop.

    • It depends on who is spending. If American consumers or the American government borrow to consume, what you say is right.

      But it was US monetary policy for decades now that the deficit doesn't really matter, because the world trusts the US and loans the money back.

      1 reply →