There is more talk of unsustainable US public debt fuelled by:
- tax reform already passed
- 400b USD additional spending just passed
- 1.x trillion USD infrastructure bill to be passed later this year.
CONSEQUENCE: more public spending could lead to inflation as the capacity in the economy is already fully utilized.
= >> higher inflation will lead to steeper Fed rate hikes which will increase companys’ costs and could potentially result in equity sell off, recession.
Who will buy all these US treasuries - especially if China will reduce its future US exposure???
Bill Gross already declared the end of the 30 year bond bull market!
Crypto is definitely an alternative. Especially Bitcoin. No one will print more Bitcoin, but the Fed will print more USD, if no one is interested in buying more US debt.