Shall We Repeal the Laws of Economics – Part III

Government attempts to override fundamental economic laws through market intervention are largely ineffective and potentially harmful. Treasury buybacks and artificial yield suppression function as cosmetic responses that fail to address root causes like stubborn inflation, fiscal indiscipline, and the massive capital demands of the AI buildout. The U.S. faces a chronic fiscal crisis characterized by unsustainable deficit spending, which requires a shift toward fiscal responsibility and productivity-driven growth rather than temporary market manipulation. While the dollar’s status as the world’s reserve currency currently allows for continued deficit financing, persistent profligacy risks long-term debasement. Investors should remain cautious about abandoning U.S. assets, as the nation’s underlying economic strengths—such as its innovation, rule of law, and capital markets—remain unparalleled, making the search for alternatives fraught with its own distinct risks.