Daniel Lacalle, a renowned economist, has expressed concerns about the sustainability of the US dollar, citing unsustainable fiscal policies rather than cryptocurrencycurrencies such as Bitcoin.
Lacalle highlights the frightening rise of national debt, which now exceeds $34 trillion and grows by $1 trillion every 100 days. He contends that this is incongruous in the midst of a purported economic rebound and calls into question official narratives of robust development.
The crux of Lacalle’s warning is the staggering rate of debt buildup in comparison to GDP growth. He questions the perception of recovery, citing declining purchasing power of earnings and rising financial burden on American people.
Lacalle criticizes Modern Monetary Theory, which asserts that infinite government expenditure is conceivable with controlled inflation. He claims that the United States’ fiscal expansion, despite 20% inflation over four years, demonstrates a reckless disdain for the economy.
While Bitcoin has risen above $62,000 due to inflation, Lacalle believes it is not the biggest threat to the dollar as a worldwide reserve currency. Rather, a loss of trust in US fiscal and monetary policy risks a sudden loss of monetary sovereignty, rising borrowing rates, runaway inflation, and possible dollar dethronement.
Lacalle also argues that the ideological allure of Modern Monetary Theory hides serious risks of fiscal irresponsibility.
