THE GOLD CHRONICLES
with James Rickards and Alex Stanczyk
Commentary on FOMC and Rate Hike
How VAT may enable a revenue neutral solution to allow Trumps fiscal and tax cuts plan
One of the dangers to VAT is that it is prone to a creeping rise in the tax rate
Scenarios for consumer reactions to VAT perceived as price inflation
How increasingly fragile markets combined with highly leveraged financial services institutions are leading to amplified risk levels for the entire financial system
Market fragility from Jim’s view is a function of system scale – if you double the size of the system the risk increases exponentially
The system has not deleveraged since 2008, but has increased leverage and concentrated in an even fewer number of banks
The derivatives market is approaching one quadrillion dollars in size, approximately ten times the size of global GDP
Nation debt levels, debt ceiling, comments on the math of servicing the increasing debt burden in consideration of the debt to GDP ratio
The first $20T of US Government debt is treasury debt, with a debt to GDP ratio of about 105%, and it does not include contingent liabilities such as social security and Medicare
If counting contingent liabilities, it brings the US debt number to more than $100T, and the debt to GDP ratio closer to 1000%
The most likely path out of the current debt for the US is inflation, which means inflation is ultimately required and likely
You can follow Alex Stanczyk on Twitter @alexstanczyk
You can follow Jim Rickards on Twitter @JamesGRickards
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