In The End, the Dollar Goes to Zero and the US Defaults
The comments below are an edited and abridged synopsis of an article by Egon von Greyerz
With US and global debt exploding, von Greyerz looks at the disastrous consequences for the US and the world.
Debt explosion leading to the currency becoming worthless has happened for as long as there has been some form of money. Here we are again, another monetary era and another guaranteed collapse.
This disastrous borrowed prosperity, with zero ability to repay the surging debt, will lead to the US dollar going to zero and the US defaulting. This will happen to most countries. Many say that the US can never default, but that is nonsense.
If a country prints worthless debt that nobody will buy in a currency that no one wants to hold, that country has definitely defaulted, whatever spin they put on it.
In the coming years, not just US debt but all sovereign debt will only have one buyer: The country that issues the debt. And every time a country buys its own debt, it has to issue more worthless debt that nobody will touch with a barge pole.
Printing more money to pay for previous sins has never worked and never will. And this is how money dies, just as it has throughout history.
The current monetary era started with the Fed in 1913, and the acceleration of debt and currency debasement since 1971 when Nixon closed the gold window. Just over 100 years into this era, it is now approaching the end, as they all do.
Global currencies are already down 97%—99% since 1971 and we can expect the final 1%—3% decline for all money to become virtually worthless. Remember that the final 1%—3% move means a 100% fall from today. The final collapse is always the quickest, so it could happen in the next 2 to 5 years.
Up for discussion: Debt, debt and more debt; a Fed pivot; US money supply growing at 74% annualized; $25 trillion global liquidity/debt increase at zero cost; and consequences.