Great post. One quick question - probably a dumb one:
"However, much of this debt is outside of the US, while the US Private Sector has delevered5. This is what caused inflation in the first place."
Why has the de-levering caused inflation in the first place? I'm struggling to make the connection.
I assume what you're saying it's due to government transfer payments into the pockets of corporates and consumers? But then if they used that money to de-lever they wouldn't have used it on consumption so why would it be inflationary?
Sorry if you previously talked about it and I missed it.
Thanks Chris for the Q. Delevering by pay down after GFC, then turbocharged w covid stimulus and stay at home savings. Chart I am showing is proxy for the "net debt" position of US private sector, ie debt - cash. Cash offsets debt as can be used for paydown. This is assymetrically spread, with lower income quintiles already back to pre covid state
Great post. One quick question - probably a dumb one:
"However, much of this debt is outside of the US, while the US Private Sector has delevered5. This is what caused inflation in the first place."
Why has the de-levering caused inflation in the first place? I'm struggling to make the connection.
I assume what you're saying it's due to government transfer payments into the pockets of corporates and consumers? But then if they used that money to de-lever they wouldn't have used it on consumption so why would it be inflationary?
Sorry if you previously talked about it and I missed it.
Thanks Chris for the Q. Delevering by pay down after GFC, then turbocharged w covid stimulus and stay at home savings. Chart I am showing is proxy for the "net debt" position of US private sector, ie debt - cash. Cash offsets debt as can be used for paydown. This is assymetrically spread, with lower income quintiles already back to pre covid state