The 2026 World Financial Crisis
Interest rates are rising as if this will simply compensate investors for the risk of inflation. The reality is that it will increase the economy’s inability to cope with the breakdown that is already in progress.
The moral rationalization is to protect the purchasing power of creditor claims on debtors, as measured by the purchasing power of debt payments over consumer prices.
The pretense is that creditors use their interest to buy goods and services. But already in the 18th century, critics of debt financing recognized that bondholders recycle most of their money into new loans.