99.99% of American have almost no clue about risk management. Yet they are currently marching like lemmings toward our unsustainable financial future blissful in their ignorance of hyperinflation risk, deflation risk, exchange risk, depository institution risk, counterparty risk, tax risk, political risk, index risk, model risk, currency risk, non-recourse mortgages, bankruptcy exemptions, correlated assets, and so on. In hyperinflation or depression, that sort of ignorance can kill you financially, and too often in the past, literally end your marriage, health, and even life. Wise up fast before it’s too late.
What “it will stop” means is that the buyers of our federal bonds in the U.S. and around the world will eventually say, “No, thanks. Your U.S. national debt is so high in relation to your income that we no longer trust you to pay us back and keep the purchasing power of the dollar steady. We think you are either going to default or inflate the dollar or both.” When that happens, the U.S. government must stop paying all its bills or pay them by “printing” money. “Printing” money causes inflation. “Printing” lots of money causes hyperinflation.