Probably not – but high and rising debt will boost CPI and interest rates, and stifle GDP growth and investors’ returns. In America’s real debt crisis (15 May), I wrote: “The choice is stark: Americans must either undertake radical budget reform and (public) debt deleveraging, … [Read more...] about Is Australia Risking a Debt Crisis?
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America’s real debt crisis
The exponential rise of debt is stifling its economic growth. It thus takes ever more dollars of debt to generate an extra $1 of GDP. In Fortune magazine on 22 November 1999, Warren Buffett recounted to Carol Loomis: “Someone once told me that New York has more lawyers than … [Read more...] about America’s real debt crisis
Does the RBA’s “negative equity” matter?
It admits it owes more than it owns, and if it were a company it’d be bankrupt, but insists this doesn’t matter. I’m sceptical. In Why the RBA should be abolished – and what could replace it (10 April) I demonstrated that, for more than a century, central banks haven’t … [Read more...] about Does the RBA’s “negative equity” matter?
Why the RBA Should Be Abolished – and What Could Replace It
Central banks’ inflation destroys currencies and worsens the boom-bust cycle. Milton Friedman reckoned that computers would do far better. In What Causes – and How to Prevent – Bank Crises (27 March), I showed that there’s a straightforward way – which entails no change of … [Read more...] about Why the RBA Should Be Abolished – and What Could Replace It
What Causes – and How to Prevent – Bank Crises
Duration mismatch regularly causes some banks to fail. Matching the duration of short-term assets and liabilities will eliminate failures. In my previous wire (The Risk of Higher Rates the RBA’s Overlooking, 21 March), I noted that the failures of the crypto-friendly … [Read more...] about What Causes – and How to Prevent – Bank Crises