Sunday, February 16, 2014

The classic coordination problem

The government sector. We are all realizing the mismatch between the three large sunbelt and the small states. It is being priced in and soon we will adapt, reagglomerate the states and work it out. The key is when Janet restarts QE, then the whole thing becomes obvious, and the distribution stops as gains are impossible and deflation slow tax collections.

California unable to understand banking will not be able to create a new money system. Florida stuck, and the Senate holding the budget hostage. Small states will form regional blocks for political power.

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