Ben Davies of Hinde Capital thinks the U.S., UK, and Japan are at risk of default or hyperinflation, according to an interview with King World News.
He sees different risks for the the three.
- Japan has already gone “nuclear” expanding its quantitative easing program to real assets. It will have to monetise its debt due to the size of its debt to GDP ratio, and that could lead to hyperinflation.
- The UK is the most leveraged country in the world, is it risk of implicit default through high inflation. No one needs to hold the pound, it’s not a reserve currency. And Its austerity cuts are barely cuts, but just spending not adjusted for inflation.
- The U.S. could see hyperinflation through its unfunded liabilities (GSEs, Social Secuirty) if it chooses not to renege on its commitments. If it does choose to forgo that spending, however, it is likely to see riots in the streets.
Davies biggest worry is that one hyperinflationary crisis in these three countries would lead to spillover, and all three experiencing soaring inflation.
Not a particularly rosy picture, but an interview worth listening to for its perspective.