How Will a Bankrupt America Fund Socialism? - a podcast by Jay Taylor

Alasdair Macleod, Patrick Highsmith and Michael Oliver return. The U.S. has three categories of buyers for U.S. Federal debt: the financial and non-financial private sector, foreigners, and the Fed. The banks in the financial sector have limited capacity to expand bank credit and American consumers are being encouraged to spend, not save. Except for a few governments, foreigners are already reducing their proportion of outstanding federal debt and there is every reason to believe that trend will likely accelerate as they suffer losses from plunging bond prices in an inflation-driven, rising-yield environment. With that, dollar hegemony will be threatened. That leaves the Fed. But the Fed recently committed to taper quantitative easing and it cannot be seen to directly monetize government debt. Meantime, the Biden Administration is pushing as hard as they can to spend endless trillions of more dollars in power-grabbing, give-away schemes, The Fed will be faced with a bad choice: protect financial asset values and not the dollar, or protect the dollar rrespectively of the consequences for financial asset values. The financial carnage from either inflation or deflation appears unfathomably large. We can think of no asset better than gold to hold purchasing power value in either financial extreme. Patrick will update us on Firefox Gold’s exciting high grade gold exploration program in Finland and Michael will update us on his latest views on key markets.

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