The Fragile Sea Newsletter TFS #08

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Welcome to the eighth Fragile Sea newsletter.

This business edition of The Fragile Sea looks at the macro factors of growth, debt, inflation, and interest rates, in light of global risks, and the resilience, or lack thereof, in our systems, tools, companies, and institutions, to manage potential shocks.

Quickreads

• The Groves of Academe. We look at studies on interest rates and inflation, including one that analyses data stretching back over 200 years. None of the studies suggest that increasing levels of debt are sustainable.
• Around the Corporates. A concise summary of recent corporate and financial papers addressing our subjects in this newsletter.
• Around the Halls. Institutional papers on central bank activity, market correlations with cryptocurrencies, and other institutional research.
• Discussion. Turning away from the four economic factors, we look at current reports on carbon emissions and the largest carbon capture plant just turned on.
• Things that go wow. We go fishing with some good news for fish stock management, and the success of a first-ever human trial of a cancer vaccine
• I wrap up in What's coming up, and finish with a short Kokinshū poem.
• TFS#09 will be out Thursday, 23^rd May, at 8:00 pm, UTC, if all goes well.

Let's go!

The groves of academe

Debt and GDP

In their paper, ' Growth in a Time of Debt' (2010), Carmen M. Reinhart and Kenneth S. Rogoff search for "a systemic relationship between high public debt levels, growth, and inflation" [1]. Their results incorporate data from "44 countries spanning about 200 years", and "more recent data on external debt, including debt owed both by governments and by private entities".

They find that when gross external debt reaches 60 percent of GDP, annual growth declines by about two percent. Levels of external debt in excess of 90 percent of GDP, cut growth rates roughly in half. As countries hit that debt tolerance ceiling "market interest rates can begin to rise quite suddenly, forcing painful adjustment".

Agarwal and Baron 2023 present a new perspective that rising inflation can depress GDP. They argue that this is counter to classical theory that posits "increases in inflation have little effect on real gross domestic product (GDP), as inflation increases both prices and wages similarly and merely alters the units of measurement"[2]. They note that this and other theories have difficulty in explaining stagflation, which exhibits both high inflation and low economic growth. Inflation can also impair the banking sector, which produces multiple asset allocation and other economic problems.

Interest rates and growth

Looking at one of the underlying issues that remains at the core of most macroeconomic theories, that is, the interest rate thesis that lower interest rates result in higher growth and vice versa, Lee and Werner 2023 found it not to be the case: "we find evidence that interest rates are not negatively correlated with economic growth and do not cause growth".

"Instead, we find evidence that the relationship may be the opposite in both dimensions. This adds to recent doubts about the prevailing conduct of monetary policy and common theoretical models. Specifically, lowering interest rates may be counter-productive when trying to stimulate the economy" [3]. This is highly readable and insightful paper, more work is needed to see if other research points in the same direction.

Inflation and debt

Another paper finds that inflation cannot be relied on to lower debt significantly. Hilscher et al., 2022, looked at whether future inflation would substantially erode the real value of current public debt, and concluded that "inflationary debt debasement by more than a few percentage points of GDP is unlikely" [4].

Pettis 2020 also challenges the notion that a country’s national debt burden is sustainable if the interest rate on its debt is less than its expected GDP growth rate. Pettis notes that the theoretical equation offered by Thomas Piketty, of wealth growing faster than economic output, expressed as r > g (where r is the rate of return to wealth, and g is the economic growth rate), does not apply to the sustainability of a country's debt burden. It is much more dangerous for a country to allow its debt to rise, if r > g than if r < g [5].

BNP Paribas explains further: debt sustainability is about "more than keeping the debt ratio stable under certain circumstances. It is also about the resilience to interest rate and growth shocks" [6]. They point out that high-debt countries have a higher r to g ratio, with a higher probability of downside risks (rising r to g).

De Rugy and Salmon 2022 discuss inflation in times of high debt, and note how much harder it is for a Government to make good policies when debt "swells so large", presenting little other choice than to "depend on annual deficit financing" [7]. This is an insightful paper. They conclude that financial authorities must control inflation, but another emergency could occasion more debt with inflation spiralling out of control "sooner than most people think", a situation in which there could be little that the Fed can do.

BNP Paribas offers the view that whether the US can bring its public finances under control "also matters for the rest of the world, given the central role of the US Treasury market and the US dollar in the global financial system" [8]. If the US persists in high budget deficits, they will exert "upward pressure on long term interest rates in the US and abroad, thereby weighing on growth".

Dollar devaluation?

Devaluing the US dollar has been recently mooted [9], [10], [11] but whether that really solves the level of debt long term is an open question. The BNP Paribas outlook for 2024 is bearish regarding the USD, however, ongoing geopolitical tensions and diverging trends between the US and the Eurozone will moderate, in their view, any effects of the "expected USD depreciation" [12], an interesting insight.

Inflation and money supply

John H Cochrane noted in 2011 that there had been a heated debate among economists and policymakers on whether there was serious risk of inflation with aggressive increases in money supply, and interest rates too low, and whether the Fed could reverse course if inflation emerged. He suggested "As a result of the federal government's enormous debt and deficits, substantial inflation could break out in America in the next few years" [13].

Of course we now know the answer, and the persistence of inflationary pressures remains as a significant risk to the global economy [14], including, as the WEF Global Risks Report 2024 notes: "less predictable and harder-to-handle inflation heightens the risk of miscalibration of efforts to balance price stability and economic growth". They report that economic risks are notable new entrants to the top 10 rankings this year, with both Inflation (#7) and Economic downturn (#9) featuring in the two-year time frame [15]. The surprise is how far down the list they are.

Generally also, raising interest rates comes with the risk/benefit equation of reducing inflation but potentially causing a recession, a balancing act for monetary policy [16].

Systemic risk

Weinstock and Labonte 2024 note that the long-term relative shift in credit provision from banks to nonbank financial institutions (sometimes called "shadow banking"), since the 2008 financial crisis, may impact systemic risk in unpredictable ways, in part because it has reduced risk transparency [17].

Their outlook: 'State of the U.S. Economy: Policy Issues in the 118th Congress' also notes that there is still a risk of a hard landing in 2024: "Recent inflation and labor market performance suggest that the economy is still running too hot, leaving open the possibility of a hard landing later on. Inflation is much lower than it was at peak, but it is still not low enough to be consistent with price stability - that is, the downward trend toward price stability may have stalled out or may even be reversing… short-term changes in prices seem to be getting worse, not better" [18]. With the likelihood of shortages in basic foods coming, and higher prices, keeping inflation down is going to be challenging.

Within financial institutions, unrealised losses are also concerning; unrealised losses are not a solvency concern if banks have effectively hedged that risk, for example, by purchasing interest rate swaps. However, one study found that 75% of banks do not use swaps, hedging declined in 2022 when rates rose, and only 6% of industry assets are hedged [19], [20].

In a second paper, 'Federal Reserve: Policy Issues in the 118th Congress', Labonte (2024) notes that "mainstream economists view monetary policy as the policy option that can reduce inflation most quickly and forcefully in practice, and so they view the ability to effectively reduce inflation to lay primarily with the Fed… In hindsight, inflation proved to be a bigger problem than a lackluster recovery, but decades of sustained low inflation - at times, undesirably low inflation - may have led the Fed to underestimate the threat of high inflation. By the time stimulus began to be withdrawn, inflation had become high, widespread, and deeply embedded" [21].

Hidden debt

Hidden debt is a major issue, that is, unfunded liabilities by Governments. Unfunded pension liabilities in the US are estimated at between 1.5 and 4 trillion dollars, and for infrastructure repair, "$11.8 trillion in unaccounted-for non-inflation-adjusted liabilities" [22], [23], [24],

Globally, "hidden debt is borrowing for which a government is liable, but which is not disclosed to its citizens or to other creditors. And while this debt - by its nature, is often kept off the official government balance-sheet, it is very real, reaching $1 trillion globally by some estimates" (excluding the larger US hidden debt obligations) [25], see also [26], [27].

In a Harvard Business School, US Competitiveness Project working paper by Robert S. Kaplan and David M. Walker, June 2013, they noted "The United States federal government’s current and projected fiscal deficits are not sustainable. No country, even one as wealthy and resourceful as the United States, can continue to run annual deficits that significantly outpace the growth of the economy (GDP)".

They estimate that the federal government has accumulated (by 2012, now higher) around $70 trillion worth of "explicit liabilities, commitments, contingencies, and unfunded obligations" [28].

Historic declines in real interest rates

According to Investopedia "A real interest rate is one that has been adjusted for inflation, reflecting the real cost of funds to the borrower and the real yield to the lender" [29] .

Real interest rates are converging back to historic trend, that is, downwards.

Borio et al., 2017, discusses prevailing explanations of the decline in real interest rates since the early 1980s, with the premise that real interest rates are driven by variations in desired savings and investment. The paper looks at data stretching back to 1870 for 19 countries, and their systematic analysis doubts this view. They found that persistent shifts in real interest rates coincide with changes in monetary regimes, and that the role of monetary policy in determining real interest rates, over long horizons, is "underrated" [30].

Schmelzing et al., 2020 supports the long-term view of decreasing real interest rates. By looking at "archival, printed primary, and secondary sources", the paper reconstructs global real interest rates on an annual basis going back to the 14th century, covering 78% of advanced economy GDP over time.

Their findings: "against the long-term context, currently depressed sovereign real rates are in fact converging 'back to historical trend' — a trend that makes narratives about a 'secular stagnation' environment entirely misleading, and suggests that — irrespective of particular monetary and fiscal responses — real rates could soon enter permanently negative territory [31].

The Fed's monetary tools and long-term interest rates

Cecchetti 2020 provides considerable doubt around the efficacy of New Monetary Policy (NMP), deployed by the Fed. Various NMP tools are examined, including forward guidance, balance sheet tools, and negative interest rates. Among other findings, these tools "generally were not sufficient to overcome the headwinds already present", and Cecchetti cautions that "central bankers should work to incorporate NMP tools into their reaction function, (however) they should be humble about their likely effectiveness" [32].

The likelihood of low interest rates in the long term is echoed in an IMF Working Paper released in July 2020, entitled 'It's Only Natural: Europe’s Low Interest Rates (Trajectory and Drivers)'. In line with much of the literature, the paper suggests that natural rates have declined in a sample of European countries in the last 20 years. A significant part of that decline is accounted for by a fall in potential growth: "it is hard to see European growth rates increase... The implications of persistently low natural rates for macroeconomic policy are major" [33].

Higher inflation?

In the June 2020 annual report by BIS, the General Manager, Agustín Carstens, warned that soaring debt levels caused by the Covid-19 crisis could lead to governments putting pressure on central banks to tolerate higher inflation by holding down interest rates. There was a risk of a "fundamental change" in attitudes to inflation, essentially, a return to the approach to running the economy taken after the second world war [34].

Three years later, in the BIS June 2023 Annual report, one senses a deteriorating environment: "public debt reached historical highs following persistent fiscal deficits. This constellation meant a substantial loss in room for policy manoeuvre and left economies vulnerable to shocks as well as to the inevitable next recession. Then, when the pandemic – a bolt from the blue – struck, the policies tested those boundaries further, ushering in high inflation and financial fragility" [35].

Elsewhere in the same report, "if inflation proves to be more persistent than expected and central banks have to tighten monetary policy by more or for longer, financial stability risks will rise".

In light of this macro environment, let us proceed to recent corporate and financial sources on these subjects, and include other factors.

Around the houses and corporates

Bank of America. '10 Macro Themes for 2024 – Breadth in rate cuts and markets' – plenty to mull over here [36].

Blackrock. The May 04 weekly commentary – positive for US stocks, the surprise is gold [37].

BNP Paribas. Inflation and its influence on monetary policy is key to gauge economic resilience [38]. Also a fascinating visual graph in 'Each Central Bank Has Its Own Pace' on global policy rate changes from 2020 to the present, well worth noting the trend [39].

Brookings. A study, 'Is China financially decoupling?' suggests three drivers, the third being very interesting, that net foreign direct investment may be turning against China. The chart on net capital flows is illuminating [40]. As a corollary, sources on China's economy and its influence on global markets are also worth taking in the balance [41], [42].

Citi. A report by Johanna Chua on strained US - China relations seems to back these trends, with excellent charts on imports between the US, China, and Europe [43].

Can rising debt continue to be funded with Treasuries? Will there be enough demand for them? A Goldman Sachs article asks the question: are rising US budget deficits causing Treasury yields to climb? [44].

Two articles from Jan Hatzius also add to our investigations this newsletter: 'Global Views: Cutting Through the Noise' offers a relatively 'optimistic global growth' view [45], and 'Getting Better All the Time' discusses GDP growth statistics, their revisions after year end, and how they play a critical role for financial markets [46] .

J.P. Morgan. A global research article asks whether the US dollar strength will continue and graphs its correlation with oil [47].

Lazard. A thoughtful article on climate and sovereign debt vulnerabilities that offers practical solutions. This might be a path worth pursuing [48].

Wells Fargo offers a wealth of papers – start here and wander through the rich fields [49]. Their May 3rd weekly summary discusses signs of cooling in economic growth [50], while their May 10th newsletter has a section entitled The Calm Before The Storm, discussing the lower jobs growth numbers in the States and price-fatigue in cooling consumer sentiment, a useful analysis, though I wonder which storm they might be referring to.

Yahoo Finance reports the Dow experienced its best week of the year and eighth straight session of gains, plus the S&P 500 marching back towards its record high [51], whereas, in another report, it quotes a  University of Michigan consumer sentiment survey reporting a 13% decline in sentiment for May, amid inflation concerns [52].

Zurich. The Monthly Investment Insights is always short, sharp, and incisive. For May, their comments on companies beating earnings expectations, in an earnings seasons not over yet, and the continuing vulnerability of stock markets to disappointments in growth and inflation, are worth checking out [53].

Around the halls

BIS and cryptocurrencies

I am always interested in the papers put out by BIS. In one area, cryptocurrencies, BIS has been an influential force in limiting access to on- and off- ramps for crypto to the global financial systems, even while co-opting innovations from the crypto world.

According to the World Economic Forum, over 98% of the global economy’s central banks are researching, piloting, or deploying, central bank digital currency (CBDC) [54], so there is little doubt that BIS is intimately involved in digital currencies, being the institution for central banks globally.

I wonder though, if this directing and controlling, is limiting innovation. The General Manager of BIS, Agustín Carstens, has published many useful and insightful papers on a great range of subjects over a long period of time. One of his latest, 'Finternet: the financial system for the future', along with his colleague Nandan Nilekani, is of the same high standard. Graph 4 on page 19 represents a high-level architecture of this new proposed global financial system [55].

The paper is an excellent read, but leaves one thinking, here is a global institution copycatting an innovative industry - one that has had its problems, that's for sure, at the same time as limiting that industry from operating. I know many will disagree, some ardently, however I cannot avoid the thought that this could be a classic case of monopoly power, without wanting to take away all the good ideas within the paper.

For sure, the paper has many attractive, connected ideas, and I concur with the expressed view that the consumer should be central and protected, but the three aspects noted – strangling ramps to/from the crypto industry, copycatting its innovations, and limiting innovation from non-central bank players, seems to me to be anathema to the overall underpinnings of efficient market theory, the deployment of capital, and economics 101. Adam Smith, where art thou?

Is it: "we want innovation but only our way and with our players"? Some locations, Dubai for example, are well on the way to a new innovative financial paradigm, that is a critical enabler of multi-participant innovation.

The US House of Representatives last week voted in favour of a resolution to oppose the SEC's crypto accounting policy (essentially that tokens should be treated as securities and subject to full securities law), and President Biden has vowed to veto it [56].

I wonder why there is so much concern about the mighty US Dollar's strength, that crypto should be strangled, i.e., that it should be seen as a threat? With more foresight, appropriate regulation and incentive for innovation would be preferable in the long run, to strangulation.

The sense I get is that it is growing stronger, the horse has already bolted, so to speak. But I am in two minds - the global financial system must be resilient and protected, but with the staggering amount of debt washing around, it seems fragile and vulnerable in the world we are heading in to.

Crypto and macro factors

Given that this newsletter is focused on debt, inflation, growth, and interest rates, I post the following, hopefully balanced, views of correlations between crypto and the four horsefolk of the econopalypse:  

• 'Decrypting financial stability risks in crypto-asset markets' (ECB, May 2022), notes that systemic risk increases with the interconnectedness between crypto-assets and the traditional financial sector: "It is important to close regulatory and data gaps in the crypto-asset ecosystem to mitigate such systemic risks" [57].
• 'Impact of Cryptocurrencies on Inflation: Evidence from BICS Countries' (Mar 2024), suggest that the findings indicate there is no significant impact of cryptocurrencies on the inflation of BICS countries [58].
• 'Worsening US debt outlook seen more in gold and bitcoin than in bonds' (Reuters, Apr 2024), noting, "the rapidly worsening U.S. fiscal situation remains a key driver for some investors" (in investing in gold and bitcoin) [59]. This is a good article.
• 'Crypto Needs Comprehensive Policies to Protect Economies and Investors' (IMF, July 2023), noting "To protect national sovereignty, it is important not to grant crypto assets official currency or legal tender status" [60]. There it is, shut down a trading function for crypto, a function that has included everything from shells to pieces of paper (so what makes crypto different?), even while pursuing their own [61], [62].
• 'Crypto and Inflation: A Complex Relationship' (Supra, Apr 2022), noting the correlation between Bitcoin and the S&P, and that this would seem to indicate Bitcoin is subject to the same market factors, for example, interest rates, as more traditional assets [63].
• 'Digital Euro: Stocktake and next steps'. A glossy presentation by Piero Cipollone, Member of the Executive Board of the ECB, 10 May 2024, is a super piece of work, exciting in some ways, to see just how close a digital euro might be. As an aside, the graphics design, with unusual combinations of colours, is also first-class.

Other institutional studies and macro factors

Congressional Research Service. I have written previously about the work of Marc Labonte, Specialist in Macroeconomic Policy. In 'Risks to the 2024 Economic Outlook' (Apr 30, 2024) Lida R. Weinstock and Mark Labonte, in two pages, deftly analyse geopolitical, consumer, and corporate debt in a higher interest rate world. Of all the papers these past two weeks, on the chosen subject matter, this is the best source I have read [17].

Discussion

Why did I write this newsletter?

The summation of the main theme of this newsletter is simply: whatever is coming our way economically, global sovereign debt is unsustainable and limits the tools of central banks in times of financial strife.

It's time we came together and sorted this out, there are plenty of risks out there, geomagnetic storms, food shortages, weather, heat, soil degradation, the last thing we need is a vulnerable global economic system. It's time.

Carbon emissions

To move away from market correlations now, but as a case in point, this week saw reports on the record-breaking increase in CO₂ levels in the atmosphere [64], followed by reports on what a 3C degree higher world would look like [65], already with baby bumblebees cooking in their nests because of the heat [66].

I engage with a few climate sceptics close to me – and I enjoy our discussions, wanting to understand more. My view is that carbon levels in the atmosphere are not particularly cyclic, considering the last time carbon levels were this high in the atmosphere, to the best of our scientific knowledge, was 14 million years ago [67], [68], and levels are headed higher [69], [70]. Worse still, they are accelerating [71].

"But carbon is good for us, everything grows better in a carbon rich atmosphere", according to the CO2 Coalition [72], and yes, for a time, higher levels do indeed make plants grow more [73], but the carbon cycle is complex [74], [75], and quickly becomes toxic [76], [77].

One of the first papers I came across on carbon emissions, around 2014, described just how toxic cardon dioxide becomes in the atmosphere, entitled ' Long-term carbon dioxide toxicity and climate change: a critical unapprehended risk for human health', by Phil N. Bierwirth PhD, Emeritus Faculty, Australian National University. The paper has been updated quite a few times since, the latest in February 2024 [78].

This paper sparked my initial dive into the carbon cycle, and from there, the nitrogen cycle, soil, agriculture, and climate. Since then, of the literally thousands of papers I have read, from many and varied points of view, and across a wide range of subjects, this remains one of the top five papers I have read.

In 2022, Bierwirth published 'Long-term exposure to climate change levels of atmospheric CO2 may cause kidney and cardiovascular disease' [79], and in October 2023, a YouTube video: 'The long-term breathing of climate change levels of CO2 may be a serious threat to our existence' [80], among other works.

Science and belief

I keep an open mind on the science, seeking to understand why opposing views continue, in belief, and to question my own understandings, and educate myself more. It motivates a lateral dive into how and why opposite 'beliefs' remain so persistent, and another lateral dive into how we know what we know, the relative strengths and frailties of the so-called 'scientific method', and how science seems to be increasingly under attack.

Science is the best we have, we are right of course to challenge everything, but sometimes continued challenge seems to lose the plot, it's no longer about being objective, but about winning, or entrenching a view, regardless of anything. I think we sometimes lose the want to listen and to learn.

I wonder also, what it would take for someone, myself, included, to change a view, based on a balance of reasonable inputs, but it's not a subject I feel very positive about. We live in an increasingly fragmented world, sometimes with blatant adherence to views beyond reason. Don't look up.

I cannot help wondering if the story of humankind will ever meld together all of us in a common goal, to protect, preserve, and to conserve the beauty we grew up in, whether our story is due to end quite soon in geographical time, or whether we can pull together and combine the incredible strengths we have, to save our world.

One piece of good news - a small start to a solution among others, was reported this week, on the largest carbon-capture plant turned on recently in Iceland, with plans for far larger versions. It's a good story, by Nicolás Rivero in the Washington Post May 9^th 2024 [81].

Things that go wow

Fish stocks

Let us continue the good news.

A recent report on fish stocks by the National Oceanic and Atmospheric Administration, as reported by Andy Corbley in the Good News Network, stated that the US seafood industry has never been more sustainable, with the fewest overharvested fish stocks ever recorded, and with a strong industry worth over $8 billion per year [82], [83]. Sustainable fishing is possible.

Three days earlier, Corbley also reported "after decades of overfishing in the northwest Atlantic Ocean, hake fisheries off the coast of Spain are as large as ever thanks to timely and targeted conservation measures" [84]. It's all good.

mRNA cancer vaccine trial

The Good News Network also reported on the first-ever human trial of an mRNA cancer vaccine developed at the University of Florida that successfully reprogrammed four patients’ immune systems to fiercely attack glioblastoma, the most aggressive and lethal brain tumor [85].

Time to finish up now, let us live in hope and optimism for our world.

What's coming up

This newsletter was late for various reasons – I have a complex project on now, and my time is very short to fit everything in, so the next newsletter may well be late also.

I do want to concentrate on completing Part 4: AI and Sentience of my nine-part series on AI 2024 Connections, there are many developments there that have moved on, and I am ready to write it now.

TFS#09 will be out, hopefully, Thursday, 23^rd of May, at 8:00pm, UTC.

It's free to subscribe here.

Thanks for reading. I hope you can join me again, till then, take care,

Brent

The brief

First month of spring

Has reached its eve;

O, to make the blossoms’ profusion

Impossible to pass away!

SAHYŌE NO SUKE SADAFUMI UTA’AWASE 2 [86]

Bye for now

Room 5000 - a short story I wrote in 1981 about a computer becoming sentient

TFS#09 - What do Neoliberalism, Friederich Hayek, markets, algorithms, AI, and creativity have in common? We delve into these subjects for more connections

TFS#08 - What are the correlations between growth, debt, inflation, and interest rates? In this business edition of The Fragile Sea, we go hunting in corporate, institutional, and academic papers for insights in the face of heightened political, economic, corporate, and environmental risks, and more besides!

TFS#07 - We discuss a mixing pot of subjects - the state of AI, will there be food shortages this summer? good things and not so in energy, pandemics - are we ready? some remarkable discoveries, and more!

TFS#06 - Can AI produce true creativity? We discuss music, art and creativity, why human creators have a strong future, and why we must assure that they do

TFS#05 - Practical guides for implementing AI, in other news, a revisit on CRISPR, and events in spaceweather, fake publishing, spring blossoms, and more!

TFS#04 - Has Artificial General Intelligence (AGI) arrived already? We look at the goings on in AI over the past four months

TFS#03 - AGI and machine sentience, copyright, developments in biotech, space weather, and much more 

TFS#02 - Sam Altman's $7trn request for investment in AI, economic outlooks, and happenings in biotech, robotics, psychology, and philosophy.

TFS#01 - Economic outlooks, and happenings in AI, social media, biotech, robotics, psychology, and philosophy.

AI 2024 Series

Part 1: Introduction / History of AI

Part 2: Technologies

Part 3: Commercial uses

Part 4: Neural architectures and sentience - coming soon!

Part 5: Meaning, Language, and Data

Part 6: Ethics, oversight and legal

Part 7: Media and social

Part 8: Future humanity

[1]:         C. Reinhart and K. Rogoff, 'Growth in a Time of Debt’, American Economic Review, vol. 100, no. 2, pp. 573–578, 2010, https://www.doi.org/10/c9tz92

[2]:         I. Agarwal and M. Baron, 'Exploring the link between rising inflation and economic growth: The role of the banking sector’, World Bank Blogs, Jun. 12, 2023. https://blogs.worldbank.org/en/allaboutfinance/exploring-link-between-rising-inflation-and-economic-growth-role-banking-sector

[3]:         K.-S. Lee and R. A. Werner, 'Are lower interest rates really associated with higher growth? New empirical evidence on the interest rate thesis from 19 countries’, International Journal of Finance & Economics, vol. 28, no. 4, pp. 3960–3975, 2023, https://www.doi.org/10/gts5q4

[4]:         J. Hilscher, A. Raviv, and R. Reis, 'Inflating Away the Public Debt? An Empirical Assessment’, The Review of Financial Studies, vol. 35, no. 3, pp. 1553–1595, Mar. 2022, https://www.doi.org/10/gts54f

[5]:         M. Pettis, 'Why Does It Matter If Interest Rates Are Below the GDP Growth Rate?’, Carnegie Endowment for International Peace, Aug. 31, 2020. https://carnegieendowment.org/chinafinancialmarkets/82610

[6]:         BNP Paribas, 'Rising interest rates and public debt sustainability’, economic-research.bnpparibas.com, Oct. 10, 2022. http://economic-research.bnpparibas.com/html/en-US/Rising-interest-rates-public-debt-sustainability-10/10/2022,47820?Lang=en-US&docid=47820

[7]:         V. de Rugy and J. Salmon, 'Inflation in Times of High Debt | Mercatus Center.’ Mar. 16, 2022. https://www.mercatus.org/research/policy-briefs/inflation-times-high-debt.

[8]:         BNP Paribas, 'Public debt: when the US sneezes the world catches a cold’, economic-research.bnpparibas.com, Apr. 29, 2024. http://economic-research.bnpparibas.com/html/en-US/Public-debt-US-sneezes-world-catches-cold-4/29/2024,49544?Lang=en-US&docid=49544

[9]:         G. Bade, 'Trump trade advisers plot dollar devaluation’, POLITICO, Apr. 15, 2024. https://www.politico.com/news/2024/04/15/devaluing-dollar-trump-trade-war-00152009

[10]:       The Economist, 'Could America and its allies club together to weaken the dollar?’, May 09, 2024. https://www.economist.com/finance-and-economics/2024/05/09/could-america-and-its-allies-club-together-to-weaken-the-dollar

[11]:       C. McDaniel, 'Trading Down: The Risks Of Dollar Devaluation’, Apr. 16, 2024. https://www.forbes.com/sites/christinemcdaniel/2024/04/16/trading-down-the-risks-of-dollar-devaluation/?sh=c86b937b7dee

[12]:       BNP Paribas, 'Economic scenario of 29 April 2024’, economic-research.bnpparibas.com, Apr. 29, 2024. http://economic-research.bnpparibas.com/html/en-US/Economic-scenario-29-April-2024-4/29/2024,49546?Lang=en-US&docid=49546

[13]:       J. H. Cochrane, 'Inflation and Debt’, 2011. https://www.nationalaffairs.com/publications/detail/inflation-and-debt

[14]:       T. Adrian, F. Natalucci, and J. Wu, 'Inflation Remains Risk Confronting Financial Markets’, IMF, Jul. 27, 2023. https://www.imf.org/en/Blogs/Articles/2023/07/27/inflation-remains-risk-confronting-financial-markets

[15]:       WEF, 'Global Risks Report 2024’, World Economic Forum, Jan. 10, 2024. https://www.weforum.org/publications/global-risks-report-2024/digest/

[16]:       T. Paul, 'How Do Increasing Interest Rates Affect Inflation?’, Aug. 28, 2023. https://www.cnbc.com/select/how-do-increasing-interest-rates-affect-inflation/

[17]:       L. R. Weinstock and M. Labonte, 'Risks to the 2024 Economic Outlook’, Economic Outlook, Apr. 2024, https://crsreports.congress.gov/product/pdf/IF/IF12649.

[18]:       M. Labonte and L. R. Weinstock, 'State of the U.S. Economy: Policy Issues in the 118^th Congress.’ Apr. 30, 2024. https://crsreports.congress.gov/product/pdf/R/R48054.

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