The path to default

 Although massive current spending in response to the COVID-19 pandemic seems justified, policymakers will have to address the mounting public debt once the crisis has passed. Policymakers will be strongly tempted to impose an interest-rate ceiling on financial institutions, but conditional tax increases would be preferable.

And the author wants conditional taxes instead. That will not happen.

We will go through the normal steps, financial controls then a meeting of the elders and default. The current information is that the Fed will foul it up.

“In an international monetary system dominated by the U.S. dollar, the unprecedented, unlimited quantitative easing policy of the U.S. actually consumes the creditworthiness of the dollar and erodes the foundation of global financial stability,” Guo wrote in an article published in the Communist Party’s Qiushi magazine on Sunday. “The world may once again be pushed to the verge of a global financial crisis"

The sudden seigniorage taxes make chaos in the currency markets.