Weekly Commentary: Big, Ugly Crisis Of Confidence

2025-07-07 12:53:00 ET

Originally published on July 4, 2025

Rarely, if ever, had a period so beckoned for market discipline. It took a fateful pass. I found myself this week pondering a fundamental Bubble Maxim: Bubbles must be quashed in their infancy, before becoming deeply entrenched by powerful self-sustaining dynamics including broad-based (universal?) policymaker, financial industry, business community, and public support. I was reminded again that unsound “money” is the bane of Capitalism; how the scourge of inflationism devastates societies.

July 1 – New York Times (Andrew Duehren): “Washington has not exactly won a reputation for fiscal discipline over the last few decades, as both Republicans and Democrats passed bills that have, bit by bit, degraded the nation’s finances. But the legislation that Republicans passed through the Senate on Tuesday stands apart in its harm to the budget, analysts say. Not only did an initial analysis show it adding at least $3.3 trillion to the nation’s debt over the next 10 years — making it among the most expensive bills in a generation — but it would also reduce the amount of tax revenue the country collects for decades. Such a shortfall could begin a seismic shift in the nation’s fiscal trajectory and raise the risk of a debt crisis.”...

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