Part 12/15:
Both experts stressed that current market conditions are unprecedented. The combination of record-high global debt, negative real yields, and persistent inflation is overwhelming traditional assets' safety. They warn that bonds could lose 40-50% of their value if yields jump, making them deeply unsafe investments.
The Policy Dilemma: Inflation versus Collapse
Larry described the Fed as 'deer in headlights', caught between the rock of inflation and the hard place of financial collapse. To combat inflation, they might be tempted to tighten policies, risking a market crash. But ongoing suppression of rates and monetization of debt push the economy closer to hyperinflation.