Over-indebteded nations rarely engage in anything within field goal range of being an honorable tactic to discharge their debt. From Matthew Piepenburg at goldswitzerland.com:
Below we consider the classic (and oh-so predictable) tactics of debt-soaked nations facing a showdown (corner) between tanking markets and ripping inflation.
Ultimately, I see a stagflationary end-game in which both occur, but for the near-term, prepare for more inflation, as it’s the option all debt-soaked sovereigns are eternally forced to take.
The Cruelest Month
T.S. Elliot famously described April as the cruelest month, but the recent (and ever-unfolding) events of May seem far crueler.
As we have warned from the very onset of this otherwise avoidable war in Ukraine, the backfiring of Western sanctions against Putin (de-dollarization, inflationary tailwinds and increasingly discredited central banks) were not only plain to foresee, but placed the West in an almost comical (yet tragic) scenario in which nations like Germany find themselves sending weapons to the Ukraine while simultaneously sending Rubles to Putin.
How did the world become so hypocritical, dishonest, cornered and silly?
