Black Swan author Nassim Nicholas Taleb warned that “a debt spiral is like a death spiral,” and the US deficit is increasing to a point where it would take a miracle to reverse the damage.
In an article, Bloomberg reported that Taleb spoke at an event for Universa Investments on Monday night, the hedge fund he advises.
The publication states that Taleb described the increasing US debt load as a “white swan,” a risk event that is more probable than a surprise “black swan” event.
Taleb didn’t comment on the impact on markets but explained that white swans include the US deficit and an economy far more vulnerable to shocks than in previous years.
He is said to have added that as long as you have Congress continually extending the debt limit and doing deals “because they’re afraid of the consequences of doing the right thing, that’s the political structure of the political system. Eventually, you’re going to have a debt spiral.”
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