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Invisible Bond Market Vigilantes: Duncan Black Is Not Shrill Enough Department

Duncan Black is shrill, but not shrill enough:

Monetizing Indebtedness: Frankly we should consider it, but it isn't happening, and nor is there any evidence that the big money people perceive that it's happening. Basically it's the Alan Greenspan culture. They know something should be happening (rising inflation and interest) but it isn't. But invisible beings perceive it might be happening, even though if such a perception existed it would show up in interest rates.

We need to go more levels of meta. The exhaustion of the U.S. government's debt capacity and the consequent steep spke in U.S. interest rates:

  • is not happening
  • is not expected to happen
  • is not perceived by anyone to be expected to happen
  • is not perceived by anybody to be perceived by anyone to be expected to happen.

What stage have we reached? The claim is that we must move to fiscal austerity right now because:

  • invisible people whom nobody can see perceive that somebody perceives that somebody else perceives that the exhaustion of U.S. debt capacity might be about to happen.