Fresh burst of supply-chain inflation; weak demand for US Treasury bonds; China house price falls ease; China retail weak, industrial production questionable; UST 10yr at 5.01%; gold dips, oil rises as Hormuz closes; NZ$1 = 57.6 USc; TWI-5 = 61

‘Now imagine that you have the power to lower these interest rates.  You would absolutely lower these rates to save yourself’

You were using ‘you’ in your original post - hence my framing in response to you. So assumed you knew who ‘you’ was. 

’I'm not saying this is right, but governments are very indebted and they ultimately call the shots’

But I thought central banks and monetary policy were/are independent of governments? Are you saying governments are going to tell central banks what to do and defy their mandate of being free and independent from political interference? That sounds like corruption.

Yes, that's one way to put it. 

Financial isn't the sense needed. 

Some of us have been warning of this impasse, for decades.

All proxy could be invalidated tomorrow - the real wouldn't have changed one iota - well, apart from a day's resource depletion.

I've long pointed out it's the HAVING of things/stuff - I laughed at the PM haring off to Singapore recently - is the real wealth. In that regard, we are getting poorer, daily. 

Edit - in my circles 20 years ago, this was being debated. Steve Keen led the pack; suggesting across-the-board proxy handouts; suggesting (then) a few hundred thou each. Those in debt aren't so much (the poor: at all) and relative wealth is intact. But money, of course, would be near worthless. We should have done the inevitable, then. 

Yvil - Dalio’s book ‘The Changing World Order’ would be a great read given your current line of thinking. It covers all of your doubts and concerns in detail using case studies over the past few thousand years of all of the other reserve currencies that have been and gone.  

The way out of this is through ‘pain’. Pain that has been avoided since 2008 or even 1971 and the US coming off the gold standard. Since then, everything has been extend and pretend. Along your line of thinking is that ‘we will just lower rates and create more debt, and devalue our currency more, in order to solve our problem’ - but in doing so create more of the problem - excessive debt relative to productivity and the ability of pay the interest expense on the already existing debt.

Ultimately the solution to this is the US defaulting on its debt obligations - which is a 100% certainty at some point in the future as they are on a one way trip there now without the ability to reverse course - or put another way - the pain to reverse course would be too financially painful for people to endure so they won’t do what is required to correct course (see what happened when Musk tried with the DOGE concept - something aimed at reducing fiscal spending in order to reduce government debt and to get the USD off the one way course to eventual default).

The big question is when will this happen. Won’t be next year, probably not this decade. But I can see it happening in the next 20-50 years at some point given the exponential rate at which US debt is spiralling out of control - and political and social instability will get worse as this financial issue gets worse. 

The link won't open for me, PDK - a blessing - because I find her pseudo-intellectualism utterly unwatchable... IMO, nothing more than an MSM status-quo sock-puppet.  

It's been a fascinating thread today, Independent.

There is an interesting phenomenon I've noticed in long-running online comment sections.

After 10, 15 or 20 years, the comment thread can almost become part of someone's identity. People aren't necessarily just defending the argument they've made today, they're defending an accumulated intellectual territory they've occupied for years.

And that can make genuine discussion increasingly difficult, because you're no longer debating simply this week's proposition. You're implicitly challenging a framework that someone has spent years constructing and defending.

But there is a deeper point here too - longevity in a debate forum doesn't necessarily mean intellectual development.

Someone could spend twenty years commenting on the same site while becoming increasingly invested in defending the intellectual position they arrived with years earlier.

That's very different from somebody who has spent twenty years developing and modifying their views as they encounter new evidence.

To my mind, the latter is what makes a genuinely interesting interlocutor.

You don't have to agree with someone to have a worthwhile intellectual exchange, but often we do, and that's great too.

In fact, some of the best discussions I've had here have been with people whose positions differed substantially from my own, but who were prepared to examine the underlying assumptions, bring new evidence to the table,  and where we can both reconsider our own positions when the evidence warrants it.

Perhaps the real measure of intellectual maturity isn't about how long we have held a particular position, but how many times we have been prepared to modify it.

Perhaps you Colin and IO think that I believe that the upcoming fiscal repression will return the economy to BAU.  This is certainly not my view, in the fiscal dominance process I have described in my posts above, the USD will lose its status as reserve currency and the US will no longer be the world's leading power.  I would suggest that this process is already on its way.

"Colin, you basically fully agree with my original post."

Absolutely, Yvil and thats why I responded - hoping that I could help to flesh out  your excellent lead, and suggest some extra aspects that could perhaps be missed along the way.

So yes, 100%, Yvil. 

Cheers
Colin

Fair point.

Queenstown will be booming when the ultrawealthy move here and emerge from their bunkers to live. They will however all be competing for limited resources in such a small place. How quaint.