“How long will our financial system last without cracking by raising interest rates?” Pablo Gil

This would be a good time to remind those who have defended modern monetary policy: now how do we fix it? This is a harsh criticism made by Pablo Gil, Head of Strategy at XT, in the face of new inflation data in the United States.

Modern monetary policy is monumental bullshit where one starts from the idea that you can have negative interest rates for life and everything to finance chronic debt in the government to even go so far as to subsidize fiscal packages. He insists that the first thing we have to think about is where we are going, thinking that zero interest rates are normal or that one can borrow systematically even as you grow. The United States has never used the moment of economic growth to reduce debt.

On the other hand, people do not see a very important problem: we have created a system that has a pillar type of zero financing costs. Some are financed at negative rates, such as Germany. And some pension plans, as we have seen in the UK, that have to do the real trick to get the returns they have to return.

The question now is not how much interest rates will rise. The key is how long our financial system can last without cracking by raising interest rates in such a way that we make one rate hike each month equal to the time it took us three quarters before.

“What caused the problems in 2008 was not the economic recession or the bursting of the housing bubble, it was finding out what was on the balance sheets of banks.”

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