I’ve been saying for the last two years that positive real rates would eventually grind the economy to a halt. That’s not some grand macro insight — it’s a mathematical certainty when you have tons of debt and the cost of servicing debt moves higher.
What I underestimated was how much liquidity and stimulus runway the pandemic left sloshing around in household balance sheets. But that cushion now looks to be gone. How do we know?
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Author: Quoth the Raven
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