When governments devalue their currency, debt issuance becomes scarcer and longer-term debt becomes replaced by shorter-term debt because bond holders recognize the pattern and know that future administrations will devalue again, creating an unsustainable debt structure (as demonstrated by the euro area's experience).
causalpending
Speaker
Daniel LayaEvidence Quote
“if you're a bond holder and the way to address the fiscal and trade imbalances is to devalue artificially the currency, then why are you going to buy long-term debt when you know that at some point in the next four, five years, somebody else is going to do it again?”
Source
Inflation Is Not a Mistake – It’s a Strategy, 2025 Crash Explained | Daniel Lacalle— Soar FinanciallyCreated: 8/11/2026, 7:10:29 AM
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