I’ve learned a few macro things about money during my time in crypto:
- Money evolves. We used to be on a gold standard, and we decoupled in 1971
- If money isn’t backed 100% by something, it’s just a confidence game.
- Confidence games tend to have have a half life
Given that context, is it fair to ask:
Or to ask?
Or to state?
We’re obviously in a unique period of time. The dollar is getting stronger, not because we have great monetary policies, but because everyone else’s sucks even worse.
Is $6 Trillion Too Much
Nobody knows the answer to that. We could ask the same of $60 trillion or $600 trillion.
The question is, when does the dollar lose the confidence that the world has placed in it? Does the world feel taken advantage of by the U.S.? They loaned us massive amounts of money, and we lowered our taxes to emphatically state that we have no intention of ever paying it back other than by loaning more money from you tomorrow, or printing more.
To be clear. The United States was already BROKE before this event.
The U.S. government has $132 trillion in unfunded liabilities according to the USDebtClock.org. The two largest components:
So given that we’re broke. Buy printing another $6 trillion, does that mean we’re “more broke”?
Well, if you Google “can you get more broke”, the first article was “40 things You Shouldn’t Do When You’re Broke”:
If the U.S. was a person, we’d have to admit that we’re broke yet we do all of the things above. We’re broke, but we act like we’re rich. Because we can.
Until we can’t.
And that’s the whole point.
Things Are Broken…Irreparably Broken
I don’t mean to sound bleak, but the system is not going to be fixed. Trump is obviously a fiasco, but past Presidents were not much better. Our unfunded liabilities continued to mount rapidly. Because our government is no longer able to solve our problems. Anyone government official who actually started asking how we ‘re going to solve Social Security or Medicare, would be voted out of office. So we kick the can down the road.
So is $6 trillion too much? Is it going to be the straw that broke the camels back?
Well, the stock market reacted positively to the news. The biggest one day percentage gain in the history of the stock market.
Imagine what the market will do when we announce a $10 trillion program.
The dollar will continue to reign supreme. Until it doesn’t. And everyone will look at the debt, the unfunded liabilities, the infinite printing of money, and say, “Of course”.