03-01-2021, 09:18 PM
(03-01-2021, 06:06 PM)jalanlong Wrote: i am skeptical of the ability of the Fed to raise rates given the interest on the national debt.
I am 52 and completely debt free. We are living on my wife's income so my income is totally free for savings. My current plan is to invest every paycheck into dividend growth stocks and hold them (hopefully) forever so that they throw off some decent income in my retirement and for my kids later in their lives.
Currently that is true. The size of the debt places a cap on how high rates can rise without risking a total breakdown of our government/economy.
The debt can be dealt with in several ways:
1. Reduction by paying it down;
2. Reduction by devaluation of the dollar;
3. A combo of 1. and 2.
My bet is on 3, with the majority of debt reduction coming from inflation. It’s how we’ve done it since the USD became a global reserve currency.
I’m curious how we continue the gravy train when the pricing of oil in dollars is no longer central to the functioning of the global economy. We already made one successful shift from Bretton Woods to the Petrodollar. The next shift should be equally profitable.