The Cheap Money Era Is Coming to an End
00:00 So this was never a story about the world running out of money. If you've taken an economics 101 class, you know how this ends. The supply of paper is exploding, while demand for it thins at the long end, which results in the cost of borrowing going up for everyone at the same time. And while the long end
00:16 continues to get more expensive as the demand doesn't match the supply, everyone moves short. There's more than $8 trillion sitting in American money market funds, an all-time record. So this was never a story about the world running out of money. The world has plenty of money.
00:30 What it ran out of is money that will sit still. We already tried the workaround. That was the whole point of shortening. Stop selling the 30-year bond nobody is forced to buy, and sell the short stuff people actually want. Except short debt doesn't go away. It comes back, and it comes back more
00:45 expensive than it was before. That's a third of the developed world's fixed-rate debt maturing by 2027. Not a forecast, a slow renewal from cheap debt to expensive debt at about two percentage points higher. Nothing has to go wrong for that The bonds just have to reach their maturity date, and none of
01:03 what's happening is hidden. The data is sitting right in front of our eyes. You just have to know where to look.
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