Re:Everyone expected a recession. The Fed and White House fo...
by Ekaros on Monday December 25, 2023 @07:59AM
(#38762241)
They would get no more new debt.
It is revolving system. Old debt is paid with new debt and then even more debt is taken for consumption. If this stops, it means no one would loan again. They would trade in alternative ways. Or then the rates must go up to match the risk premium of not getting principal back.
End result is probably starting to print money. Which then will just lead to even higher rates to get the return.
It is revolving system. Old debt is paid with new debt and then even more debt is taken for consumption. If this stops, it means no one would loan again. They would trade in alternative ways. Or then the rates must go up to match the risk premium of not getting principal back.
End result is probably starting to print money. Which then will just lead to even higher rates to get the return.