Condor Resources Inc V.CN

It's all about the DEBT

[Crashcomingsoon]

No Soft Landings
https://www.mauldineconomics.com/frontlinethoughts/no-soft-landings

My Comment: Interesting read. I especially like Bill White's comments. I really think there will be a heavy price to pay for the 35 years of reckless Fed policy which has created enormous economic distortions.  It really is all about the debt which will implode.  Just how much sovereign debt can the US stand?  We will find out in the next recession.  I think it will mean higher interest rates demanded by Treasury bond buyers unless the Fed becomes the buyer of last resort which will mean hyper inflation. 

Excerpt:
“My real worry on the downside is that it may be that the fragilities are so great at the moment that a moderate degree of tightening will in fact spark a downturn of such a magnitude that even if the Fed does back off, that there's not much that can be done about it, that will have a downward momentum... that we really won't be able to handle.”

Deflation does the opposite, making debt repayment harder. That would be a guaranteed global crisis. Many overextended debtors (especially emerging market corporations with dollar-denominated debt) would be unable to pay—probably including some governments. Then what? Bill White—one of a handful on our planet who will have the answer if one exists—says we aren’t ready for it.

Yes, we have a system for individual and corporate bankruptcies. It works but slowly. Exponentially increasing its case load will be a problem. We don’t have a good system for handling sovereign defaults. Are we going to foreclose on China? Italy? Brazil? That won’t go well.