An excellent interview and fast-paced when they get properly started. Thanks ChartsGuy!
She explains the different effects of different forms of indebtedness:
Taken to extremes:
- public debt is inflationary because until there is a final inflection point, nation states via their feds can continue to issue credit, or spend money fiscally.
- private debt is deflationary in that banking failures and company failures usually result.
The issue is when will those inflection points arise? Because the US Fed and the RBA can reach limits. Then there is fiscal policy which also cannot continue indefinitely (depending on the ability to service the loan etc.)
Already the ANZ bank is speculating that the RBA won't be able to hold interest rates down beyond 2023, a year before the RBA signalled.
