Is There a Government Bond Bubble?
“YES, there is a government bond bubble. And it’s huge.
Uncle Sam and his counterparts in the EU and Japan are broke and are, almost surely, going to print vast quantities of money to cover their enormous spending obligations.
The printing presses are already working full time. The Fed, for example, has increased the monetary base by 140% in the last three years. If and when this money gets lent out by the banks (they are now holding much of it in excess reserves) prices of goods and services (the price level) should rise by 140%!” Read more.
Laurence Kotlikoff
Economics by invitation, August 20, 2010.
The Economist
