Deflation is coming, and with it comes debt forgiveness & negative interest rates

Not inflation.The inflation we are experiencing right now is transitory. That’s the simplest explanation given the nature of the case and the base effect. What ‘inflation pumpers’ can’t explain is why the disinflation we’ve experienced the last 40 years would suddenly change. The burden of proof is on them. And given that the default is for disinflation to resume, there’s no reason it can’t go negative: deflation.You see people everywhere talking about inflation:In the finance world, when everyone is saying and doing one thing, bet on the opposite outcome. Everyone is saying there will be inflation, so it probably won’t happen. That’s just the way it works in markets. The fact that the mainstream media and the neighborhood Karen are talking about inflation should terrify you. Don’t follow the herd! And the fact that the Fed hasn’t been able to even get 2% inflation over the past decade should give you a hint. The Fed is worried about deflation, not inflation.Don’t fall for the pump fake.Remember, the Federal Reserve is a lender, not a spender. At least right now, they aren’t allowed to spend, therefore, they necessarily can’t increase the velocity of money.And with deflation, we will see negative interest rates. The Fed won’t have a choice. They’ve been reluctant so far in our disinflationary environment, but deflation would force their hand.Deflation is very bad for those in debt. That’s because deflation increases the real value of debt. And since our society currently runs on debt, it would be painful. Now some would argue that this pain is needed, but the moral and political problem is structures that put people in this position, to begin with, by giving crazy incentives: the Federal Reserve and Congress, for example.So not only will we have negative rates, but Congress will be forgiving debts…