by Michael Dioguardi, SHTF Plan:
Previously, I have argued that sovereign credit systems are structurally biased toward expansion: crises justify new interventions, those interventions are never fully reversed, and each cycle leaves behind a higher institutional baseline than before. The Cantillon effect ensures that the gains from monetary expansion distribute unevenly, flowing first to those nearest the financial system.
In another article, I examined why market discipline cannot correct this: Banking regulation assigns zero risk weights to sovereign bonds; liquidity rules mandate their ownership; central bank collateral frameworks treat them as foundational assets. The system is not merely insulated from discipline, the regulatory architecture ensures that insulation compounds over time.
No justice 59 years later