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Let’s ask “cui bono” of the $33 trillion in added debt and the $9 trillion added to GDP: to whose benefit? I’ve been thinking about how hard it is to get our heads around big numbers. Technical analyst Sven Henrich (@NorthmanTrader) recently provided one method to grasp the immense wealth of Elon Musk: How to become as wealthy as Elon Musk?

When the system can’t borrow more and distribute the insolvency, it implodes I started writing about debt saturation back in 2011. The basic idea is we can continue to borrow and spend as long as one of two conditions hold: 1) real (inflation-adjusted) income is rising, so there’s more income to service additional debt, or 2) the cost of borrowing declines so the same income can support more debt.

Most people would be horrified by a 40% decline in their “investments.” When bubbles pop, speculative assets don’t drop 40%, they drop 90% or even 98%. The irony of the sudden panic about real-world inflation generated by rising wages is two-fold:

Clinging to delusional fantasies of “free wealth” won’t lead to positive outcomes, any more than swallowing handfuls of meds leads to “free health.” Under various guises, labels and rationalizations, “free money” has now been established as the default policy fix for any problem.