Higher rates will come to the rescue.
If not, then even more extreme chaos out there especially if Trump cuts them off...
California’s contributions to its teachers’ pension fund are projected to almost triple https://t.co/yIT7wtTpZ1 pic.twitter.com/RWcIxkehwm
— Bloomberg Markets (@markets) February 6, 2017
2 comments:
Positive yielding sovereign debt is welfare proportional to wealth. If California retirees need welfare we should just give it to them via a BIG or UBI and we can help "finance" it with negative interest on inherently risk-free sovereign debt with the most negative interest on "reserves"* at the FED beyond a, say, $250,000 individual citizen limit.
There's a way to straighten out this mess via ethics and I suggest we do so before it's too late.
*a euphemism for private sector account balances at the central bank in the case of banks, etc.
When negative rates on new sovereign debt are imposed (as they should be) then existing sovereign debt will be more valuable.
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