“Any great power that spends more on debt service than on defense will not stay great for long.”
Investors pushed U.S. Equities to all-time highs last week. This is an extraordinary momentum rally that appears to be attracting increasing amounts of investor capital in a sign that the economy can keep its momentum up to, and perhaps beyond, the election. This is a logical assumption based on the realization that the U.S. government is addicted to spending (there is no mention of cutting it by either party.) The rising cost of debt service seems almost an afterthought, and if the debt burden gets high enough to slow the economy, the Fed will increase stimulus. Higher bond yields do not appear to be part of any in-depth analysis. Except mine.
