Ancient religion gains new benefit
The article discusses the escalating crisis of public debt in major economies, and how the rising costs of financing old debt and refinancing it at the expense of national budgets will lead to increased economic and social pressures. The author explains that the majority of government debts are refinanced with new debt at higher costs, which threatens to reduce spending on essential services such as investment, healthcare, and education. The article highlights that traditional options for addressing this issue—such as economic growth, taxation, or inflation—will be employed more extensively, with a likely increase in the use of "financial repression" policies that involve deploying financial and monetary tools to ensure continuous debt financing. This approach has been historically used after major wars. It draws attention to the fact that the main challenge lies in the rising cost of debt servicing, which could impact asset valuation and wealth distribution. The piece suggests that the coming period may see a gradual shift in the concept of asset management, emphasizing the importance of monitoring long-term Treasury bond yields and understanding how they influence the economy and investment.
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