| > I don't see a path for the dollar to regain the credibility that it had before On the contrary, March 2020 demonstrated that USD is the only game in town, everything collapsed except that. Then the USD "decided" to collapse via tons money printing and zero interest rate. Both policies enacted by the Fed in order to support recovery and its double mandate of stable prices and maximum employment. But there is a huuuge difference between collapsing due to market conditions and actively deciding to debase in order to support market functioning, prices and employment. This seems a subtle difference but it is not, it's the same difference that exists between genuinely losing a boxe match or going down on purpose for the good of the boxing business. > I'm a citizen yes, but there is no equity There is equity and also dividends, you just don't see it your portfolio because it's impossible to split the ownership of a bridge or an airport or a port. > the equity would be worthless and we would be insolvent A debt of 130% income is actually not even that serious, and besides the US can make that go to 10% or even 5% if it uses all its military might to anness and acquire land and GDP from other countries. The possibility of selling federal land is also priced in. > It isn't PEOPLE who are doing the lending, for the most part these days If you read balance sheets you actually see it's not just the Fed, also surveys say that the 60-40 equity-bonds portfolio is still the most popular for family offices, pension funds and even retail investors The 40% is mostly treasuries, so again it's not just the Fed |
I'm talking about credibility going forward. I said I agree with you for past events, and you again cite past events. The consequences of that intentional choice going forward are what matters.
> There is equity and also dividends, you just don't see it your portfolio because it's impossible to split the ownership of a bridge or an airport or a port.
Splitting the ownership of things like that to share in profits is literally how equity financing works. I'm not entitled to any profits that the government earns, should it ever actually have profits. Sure, I get to use the publicly owned land and airports, but to call that a dividend or equity is ridiculous. Your analogy would be like saying that since I am a google user, I therefore am a google shareholder. Similarly, a foreign citizen can also use our airports, it doesn't make them a shareholder of the nation.
> so again it's not just the Fed
You are reading past what I'm saying. I never said it was just the fed, what I meant is that the fed at that time was probably the largest market participant and the force that kept rates low, manipulating the entire market despite there being other participants. That's the point of QE-- to entice people to take debt in an environment when the free market can't provide sufficient lending. Note also as I said, many of the 60-40 portfolios are forced-- managers contractually must keep a 40% allocation of bonds.