2019-07-31 — financialsense.com
Data discredits the idea that we can grow our way out of our debt burden, he added, and we cannot borrow our way out of it either. The only solution becomes inflation, but the Fed has been trying to produce significant inflation for the last 10 years and has failed.
"What the MMT people are ignoring is the psychological limit, not the legal limit," Rickards said. "It is true that the Fed can borrow as much as it wants, but there's a psychological limit. This is what physicists call a critical threshold or a phase transition. ... I'm not saying inflation is an attractive option. I am saying it might be the only option and we can't get the inflation, so we're just heading for default with slow growth along the way to make it even worse."
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