Will the US default?
Well it makes no sense for the US to default…it has enough money to pay. The President knows they should not default, so let us hope that they do not.
However if you are tracking the US economy there is a huge…3 digits billion dollar default happening or about to happen in the Muni Bonds market….that is huge.
The Muni default will be combined with the slipping of the Euro…well Germany is likely to say ‘Hey our exports are being torpedoed by your monetary policy…so we are bailing out…’ – yuck this will mean the Euro goes for a toss…
that will hurt or help China? well it is difficult to say, but effect it will..
currently the market is not bothered …it is too bullish to worry…and to me that is a big worry…
well the US will not default wilfully, but the problem is the US inflation. Remember when the Japanese government invested in US $ bonds in the 1970s they gave 350 yen to get a dollar. When they sell these bonds in 2025….they may get 2 yen to the US $. The money was stolen by the American inflation.
Happy reading Amigos!
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