from Gold Silver Worlds:
In his latest commentary, Michael Pento writes ”there is a reason why the Fed and other central banks have been unable to achieve a healthy and viable economy even after five years of trying to manufacture one from a printing press. The truth is an economy that is soaked in debt just doesn’t grow because it is always marked by at least one, if not all three, of the following growth-killing conditions; rates, rampant inflation and onerous tax rates.”
When debt levels increase to an extent that they are equal or greater than its GDP capital flows out of the private sector due to burdensome rollovers and interest payments on that debt. Penton continues: “In addition, rising tax rates act as a disincentive to increase productivity and whatever money that is taken from the private sector is always redeployed in an inefficient, GDP-destroying manner. Rising interest costs also discourage borrowing and lead to capital shortages. And finally, inflation destroys the purchasing power of the middle class by eroding the value of the currency and leaving consumers with an inability to make discretionary purchases.”
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