Articles tagged: debt

A Private Credit Cycle Inside a Sovereign Funding Cycle: The Synthesis and a Realistic Way Forward (Part 3 of 3)

Two theses about the next financial crisis survived the first two parts of this trilogy intact and unreconciled — one holds that the crisis variable is the speed of private credit growth, the other that it is the funding cost of the sovereign itself. This final part stops asking which man is right and states the synthesis the evidence actually supports: a private credit cycle running inside a sovereign funding cycle, where one sets the shape of the shock and the other sets the price of the answer. It weighs the show's own debasement prior against the prices on the screen, names the versions of both claims that cannot fail, and sets out six dated, published markers — from auction coverage to the breakeven against the real yield — that will settle an argument between two sound mechanisms.

debt private-credit macro fiscal

Testing Both Debt Theses Against the Record: What the Data Supports, What It Cannot Settle, and What It Contradicts (Part 2 of 3)

Part one set Richard Vague against Jack Mallers: one saying the crisis risk sits in private debt, the other saying government debt is the trap. This part is the ledger they agreed would settle it, testing each claim against the Treasury's own debt and interest data, the Bank for International Settlements, the Treasury International Capital series, and live market prices. The money-creation mechanism is confirmed by the Bank of England's own bulletin, and the current private-debt level of one hundred and forty per cent checks out exactly. The claimed one hundred and fifty-three per cent peak cannot be reproduced, the market is not pricing debasement, and the roll, the gap between the average cost of the debt already issued and the marginal cost of new borrowing, is the strongest item either guest brought. The verdict is mixed.

debt private-credit macro fiscal

Private Debt or Government Debt? Two Theses on the Cause of a Financial Crisis (Part 1 of 3)

Richard Vague says the variable that causes financial crises is the speed of private credit growth, not the level of government debt, and that the deficit argument is aimed at the wrong pile. Jack Mallers says the danger is the funding cost of the sovereign itself, that Treasury issuance has floated to the front end of the curve, and that the arithmetic of constant rollover ends in a weaker dollar. This first of three parts states both systems at full strength, names each man's incentives, separates the four places they genuinely collide from the places where they are talking at different layers of the same object, and reports the one mechanism they both affirm and read in opposite directions.

debt private-credit macro fiscal

Joel Litman on Debt, the Dollar and Gold, Compared With Our Own Reading

Joel Litman, chief investment strategist at Altimetry and president and chief executive of Valens Research, told Miles Franklin Media that the data says no to a coming crash and a dying dollar — corporate credit is the canary, and it is not singing. This examination states his system at full strength, including the instrument on which he genuinely improves this series: the corporate swap market as a live leading indicator, and a supply explanation for a heavy long end. Then it holds the claim against our own published numbers and finds the load-bearing step failing. The average borrower is priced as though nothing can go wrong, at two hundred and seventy-six basis points; the weakest is priced as though something already has, at one thousand and eighty-five. The average is calm and the tail is not, and the argument is settled on dated markers either way.

debt dollar gold macro

Shaun Rein on China and the Chaotic World Order, Compared With Our Own Reading

A China analyst with three decades on the ground makes his case at full strength — the chaotic rather than new world order, the K-shaped economy, the chip boom the export controls created — and then meets this series' own document-built verdict. Where the two converge, the conclusions get stronger; where they part, one forecast is missing the variable that decides the decade.

china macro geopolitics debt

The Debasement Trade, Re-Tested: What the Stressors Do to Gold and Bitcoin, and Why the Fiscal Story Has Not Been Paid For

The debasement trade is right about the world and wrong about the price. This examination re-tests it against its own scoreboard — money supply, deficits and record central bank gold buying on one side, and the falling prices of gold and bitcoin on the other — and finds the mechanism that explains both: the real yield on inflation-protected government debt, up from one point eight eight per cent to two point six two per cent this year.

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