Replies

I feel smarter every time I listen to Kyle Bass:

http://www.youtube.com/watch?v=JUc8-GUC1hY&feature=youtu.be

Kyle makes a persuasive case for default. First Japan, then Europe, then the USA. War follows or happens simultaneously.

I have been thinking about what happens when Japan defaults and people lose confidence in fiat currencies:

1. PMs are everyone’s first instinct, of course.
2. People buy anything that can hold value whether its a truck, house, farmland, or firearms. We saw this in the 1970s stagflation.
3. As people buy things, the economy actually ticks up. Inflation starts a parabolic climb.
4. The Trillions of greenbacks around the world start flooding back here because the foreign holders lose confidence. In fact, every entity with cash will want to spend it on real goods ASAP as it drops in value. Inflation gets much worse.
5. Standard of living drops like a rock because people’s salaries/income cannot keep up with prices.
6. Civil unrest. SNAP cards still work, but will not buy enough to eat.

All this occurs because we have geniuses in DC who think they can tax, regulate, and spend the economy into prosperity.