Inflation in the United States is already reaching 7%, and industrial inflation in fact is already about 25%. According to the rules of economic science, in order to extinguish such inflation and protect savings from depreciating, it is necessary to raise the rate to a level close to the level of inflation. But do you know what happens then? The US national debt is approaching $30 trillion. dollars.
If the Fed raises the rate by 0.5%, then this will increase the servicing of external debt by $150 billion, but if it will be increased to 7%, then this is an additional $2.1 trillions dollars a year just for the interest on the debt. And if, properly, they will increase rate to 25%, then this will amount to 7.5 trillion. dollars a year. BUT! And that's not all. There is total US debt. Today it is about 86 trillions dollars. 7% of this amount will amount to 6 trillion. dollars, and 25% - scary to say: 21.5 trillion. dollars would have to be spent only on interest. That's more than the US GDP.
Do you understand the tragedy of their situation?
It looks like you're new here. If you want to get involved, click one of these buttons!