Inflation, the National Debt and the U.S. Dollar - What Could Go Wrong?

Inflation, the National Debt and the U.S. Dollar - What Could Go Wrong?

With a ballooning U.S. federal budget deficit, a growing national debt, and double digit increases in the money supply, is it time to bet against the dollar?

Topics covered include:

  • What is driving the double digit increases in U.S. home prices
  • Why hasn't inflation spiked in line with rising home prices
  • What is the velocity of money and why is it falling
  • What are three schools of thought regarding what causes inflation
  • What is the average interest rate and maturity schedule of the U.S. national debt
  • How the Bank of Amsterdam is an example of how central banks can go insolvent and shut down
  • Why the dollar has an exorbitant privilege

Thanks to Policygenius and Hello Fresh for sponsoring the episode. Use code david12off for 12 free meals with free shipping from Hello Fresh.

For more information on this episode click here.

Show Notes

Where Did Americans Move in 2020? by Janelle Cammenga—Tax Foundation

Velocity of M2 Money Stock (M2V) Chart—Federal Reserve Bank of St. Louis

Federal Surplus or Deficit [-] as Percent of Gross Domestic Product (FYFSGDA188S) Chart—Federal Reserve Bank of St. Louis

How the CPI measures price change of Owners’ equivalent rent of primary residence (OER) and Rent of primary residence (Rent)—U.S. Bureau of Labor Statistics

Consumer Price Index – March 2021—U.S. Bureau of Labor Statistics

Table 1 (2017 – 2018 Weights). Relative importance of components in the Consumer Price Indexes: U.S. city average, December 2020—U.S. Bureau of Labor Statistics

Inflation and Debt by John H. Cochrane, Fall 2011—National Affairs

US Government Finance: Debt by Dr. Edward Yardeni and Mali Quintana—Yardeni Research, Inc.

Can the Central Bank Alleviate Fiscal Burdens? by Ricardo Reis—London School of Economics and Political Science

BIS Working Papers No 902 An early stablecoin? The Bank of Amsterdam and the governance of money by Jon Frost, Hyun Song Shin, and Peter Wierts—Bank of International Settlements

EXCHANGE ARRANGEMENTS ENTERING THE 21ST CENTURY: WHICH ANCHOR WILL HOLD? by Ethan Ilzetzki, Carmen M. Reinhart, and Kenneth S. Rogoff

Related Episodes and Content

A Complete Guide to Understanding and Protecting Against Inflation

287: What Causes Hyperinflation and How To Prepare For It

295: Federal Reserve Insolvency and Monetizing the National Debt

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