Obviously we're not going to become Argentina overnight, but it is a fair example / warning of what happens when you have large fiscal deficits for years on end and then fund that with money printing and foreign currency borrowing (they did both and so got both explicit default and hyperinflation).
If you look at our fiscal and foreign account deficits, it's ugly. Trying to call exactly when and how that breaks is a fool's errand but that status quo can't hold forever.
Quote:
Originally Posted by markg91359
The prediction I will now make is that by January the inflation rate will be about 2% and all those people who claimed we would end up with 100% annual inflation like Argentina will suddenly disappear.
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In the short term you are probably right; commercial real estate and over leveraged zombie companies are a slow motion train crash between work from home and higher nominal rates, and VC is hurting as well. That's going to leave a lot of people scrambling for cash. In the long term, the government is running a 6% of GDP fiscal deficit, which is on track to get even worse as treasuries need to be refinanced at higher interest rates and the ratio of retired people to workers decays. Could take 2-3 decades for the weight of that to break the dollar but unless we make changes it's a question of when, not if.
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