At last it is official. The US now has NO debt limit.
After months of wrangling the US politicians decided that they couldn’t decide. So they decided to continue to ignore the debt limit like they have for the last 100 years.
The stock market loves it of course. A major part of the massive liquidity generated by the credit creation and money printing goes straight into stocks. So this major inflow of printed money does nothing for the real economy or normal people but makes the rich richer and the poor more indebted. Stock markets always rise at the initial stages of a hyperinflationary period. And this is what we will see in the US and many other countries in coming years. But the stock market rise is on its final leg. Thereafter we will have a secular bear market lasting many years.
Whilst US investors like the abandonment of the debt ceiling, the rest of the world has made its verdict and is now selling the dollar at an accelerated rate. Read the rest of this entry »