Financial fragility is just government deficit spending!

in financial •  8 months ago 

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https://www.aier.org/article/another-year-another-crisis

"Until the root issues of financial fragility are confronted and resolved..."

There are no root issues of financial fragility beyond those caused by the Federal Reserve monetizing the government's deficit spending which caused the inflation. That inflation will continue until the real value of wealth--most notably the bonds held by the jeopardized banking system--is reduced enough to release the resources required to pay for the government's consumption.

This is why the current government is in political jeopardy, why the next one will be also if they do nothing different. The FR can solve this problem by not accommodating the government's deficit spending. For then the government would be restrained by the willingness of bond investors to hold its debt.

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