I share this link with a little misgiving. She is clearly playing up the fear angle, my feeling is if you are going to do that keep it focused on the facts and let them tell the story. I also think she has cherry picked her charts. That said you cannot deny that the charts she is showing us are powerful and do tell a story.
On Wall Street we have a saying "people lie, the money doesn't lie". So despite her theatrics the charts of what these bond traders are doing tells a very clear story, and when billions of dollars are involved and you are dealing with the top minds in the world, that says a lot.
Now you can look at the spike in bond yields in the 1980s, the difference between now and then is the $39 trillion in debt. A 1% rise in interest rates when total debt is $39 trillion is $390 billion. Imagine the ramifications of the Federal budget had to slash $390 billion in spending, they can't touch the pentagon, they can't touch debt service and they can't touch Social Security and Medicare.
Also when they cut that budget how many more people go on unemployment?
So here is the thing, if this war would end tomorrow, and oil production returned quickly back to normal, say over the next month, that is the most optimistic outcome possible, highly improbable, and yet severe economic recession and inflation is already baked in.
If we also have the most optimistic outcome possible with AI where it does everything it promises without any of the mass layoffs predicted, and as a result corporations are extremely profitable and so tax revenue also goes up to keep pace with inflation, then and only then we are looking at a recession we'll be through in a couple of years. However, that scenario is extremely unlikely. The chance of both those two outcomes happening is less than 1%.
What is far more likely is Japan goes bankrupt, and with their collapse the US dollar is replaced with Crypto and/or BRICS, the US loses reserve currency status, and the US dollar sees hyper inflation with the US dollar being worth 10% of what it is worth now in a year or two. We are talking Great Depression or worse. Believe it or not, that is not the pessimistic view, that is simply halfway between absurdly optimistic to Eeyore level pessimistic. It is pointless talking about how bad the truly pessimistic view is.
This has happened before in human history (countries going bankrupt and countries with the reserve currency losing that status). But to happen at the same time that AI and robots could make millions of unemployed "useless eaters" that is new. Also, for the country to see the existential threat it is facing and to have nuclear bombs it can use to fight to hold on while those looking to knock the country off also have nuclear bombs, that is also something altogether new. Finally, to have these two superpowers using bioweapons as well as nukes, again, we are in unchartered territory.
