02-07-26 carib
Madres y esposas de presos políticos en Boleíta, Zona 7, quienes mantienen una vigilia ininterrumpida desde hace 30 días, confrontaron a una mujer que el día anterior se captó en video abrazando al presidente de la Asamblea Nacional, Jorge Rodríguez.
La mujer, identificada como María Malavé, de 62 años, regresó al lugar tras la polémica generada por su encuentro con el parlamentario oficialista. Ante la presión de las familias que sí tienen seres queridos tras las rejas, terminó por confesar la falsedad de su situación.
Malavé no solo tuvo que admitir que es falso que tenga un hijo preso, sino que intentó desprestigiar la labor de las organizaciones que brindan asistencia legal gratuita. La mujer asomó que había recibido dinero de la ONG Foro Penal, lo cual fue negado de inmediato.
bastards. |
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02-07-26 carib
SPAL: I tend to share that view.
Time will tell. |
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02-07-26 spal
Taking Maduro in the way it was done (effortlessly, quickly and with precision and unmatched paralysis on the Vene side) moulds and hints at the process.
There was no messy boots on the ground, no counter insurgency, no blowing up of the tunnels into Caracas, no alliances with the jungle insurgents etc.
This was shock therapy. It said to any major regime figure we can come and get you and anyone associated with you at any point.
So they have to fall in line. Thus there is no need for a hasty election. This means that logic can prevail and emotions can subside.
There will still be counter propaganda from the regime left in place. That is expected, but what they do will tell the story.
Elections will come in time. Delcey will not win. Some of the regime will slip away in the meantime.
BTW it will be easy to bump oil production to c. 1.3 billion boepd. Beyond that not east at all. Greater than this will require the election - a new regime - new laws and a restart.
I do not rule out a suboptimal restructure of old debt. Personally I expect to see this and that is what I would advise under the circumstances ... but perhaps fortunately I am not their advisor.
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02-07-26 savo
all speculation of course... but the course of events make me believe that Trump prefers Delcy over the psycho.
He could have removed Maduro... put Delcy and forced her to call a snap election... then bring in the oil companies once the new government is in place.
he choose instead to extend Delcy's reign for another 24 months, according to Warth.
I interpret that as Trump choosing Delcy to pilot the transition from 1 mm barrels to 5 mm barrels. |
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02-07-26 carib
| PS: the Delcy future, not the fixing of the country, of course. |
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02-07-26 carib
Savo: I do not think that would work, nor that is planned.
I might be wrong, of course.
Concur with SPAL on the issue. |
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02-07-26 spal
| And the article was for local consumption only ... mainly the guy was speaking to the thugocracy that the US has decided to keep in place to stablize things while the next steps are decided. I would ignore its content entirely. |
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02-07-26 savo
we need a restructuring under Delcy.
They psycho will bring in Haussmann and the odious debt concept.
Trump and Rubio have two more years to fix veni .. oil and debt... make Delcy popular in the process and have her win the next election.
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02-07-26 spal
this kind of articles are not casual.
===
100% Veni agitprop ... Merlino I agree.
You can always see it from the overly complex construction and tortured language that ideologues and manipulators are speaking (that is afterall all they ever had) - fervor and an obsession with trying to sell bullshit of their own making. |
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02-07-26 savo
Merlino.. things are moving fast and in the right direction for the benefit of venezuela and the US with Delcy at the top....
I do not think the US wants to derail that. Elections will happen when Trump and Rubio know that Delcy can win them.
In the meantime, the psycho will lean on the Floridians to boycott that plan.
As to the oil companies... there is an advantage to go in now and not wait for a future government. Some companies will take that advantage and some will not. COP already passed but others will not.
Whoever goes in now will get better terms.
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02-07-26 carib
| Another issue: currently, the US recognises the PDVsa board in exile, not the one in Caracas. This is relevant in the CITGO litigation. Will Rubio change policy, or which board will offer new bonds? |
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02-07-26 carib
Savo: Delcy can stay as president de facto until doomsday, and if there is no justification she can invent one, as long as the US administration wants that.
As a creditor, I am just interested in a restructuring with high recovery value.
After that, every holder can decide if to hold or to sell.
The Rubio plan should now move to phase 2.
The question is if phase 2 includes debt restructuring, or it will wait for phase 3 |
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02-07-26 Merlino
Savo, this kind of articles are not casual. They are most likely sponsored by the entente US/Delcychavismo.
Delcy and her group will likely continue to a date either earlier or later than 2031 so far they are functional to US strategy.
The question for me is how to secure both formally and perceptively (by the mkt) that any oil/resources contract and any agreement on restructuring will not be unrecognized by any future veni gov
I am not sure a recognition of Delcy by US/EU will do it as the llorona and other pseudo opositors will continue making noise |
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02-07-26 savo
on the recognised debtor government... interesting that you mentioned... because if this article that came out yesterday is correct... there is Delcy until 2031, constitutionally speaking... the psycho will say she is not legitimate but the US can perfectly say wait for a few more years... your time will come... ... Take a holiday.. have fun...
No habrá elecciones presidenciales en Venezuela hasta el 2031
Por: Carlos Gutiérrez | Viernes, 06/02/2026 11:35 AM |
No habrá elecciones presidenciales en Venezuela hasta el 2031
La situación política y jurídica que atraviesa la República Bolivariana de Venezuela desde el 3 de enero de 2026 plantea uno de los desafíos constitucionales más complejos de su historia reciente. La privación forzada de la libertad del presidente Nicolás Maduro, como consecuencia de un secuestro ejecutado por un Estado extranjero, ha generado un escenario excepcional, no previsto de forma expresa en el texto de la Constitución, pero que exige una respuesta jurídica rigurosa, racional y ajustada al orden constitucional.
Desde algunos sectores se ha afirmado que esta circunstancia obligaría a la convocatoria inmediata de elecciones presidenciales. Sin embargo, un análisis serio del Derecho Constitucional venezolano demuestra que dicha afirmación no tiene sustento jurídico.
La Constitución y las categorías de ausencia presidencial
La Constitución de la República Bolivariana de Venezuela distingue claramente entre falta absoluta y falta temporal del Presidente de la República, reguladas en los artículos 233 y 234, respectivamente.
El artículo 233 establece de manera taxativa; es decir, cerrada y no ampliable por analogía, las causales de falta absoluta: muerte, renuncia, destitución decretada por sentencia del Tribunal Supremo de Justicia, incapacidad física o mental permanente certificada, abandono del cargo y revocatoria popular del mandato. La importancia de esta enumeración cerrada radica en que no permite interpretaciones extensivas: si un hecho no encaja en alguna de esas causales, jurídicamente no puede calificarse como falta absoluta.
En el caso del presidente Nicolás Maduro, ninguna de estas causales se ha configurado. No ha renunciado, no ha sido destituido por sentencia firme, no ha sido revocado por el pueblo ni ha abandonado voluntariamente el cargo. Su ausencia deriva de un hecho de fuerza mayor, consistente en su retención forzada por un actor externo, lo cual excluye cualquier presunción de voluntad política de abandonar la Presidencia.
Por su parte, el artículo 234 regula las faltas temporales, las cuales permiten la continuidad del Poder Ejecutivo mediante la sustitución funcional del Presidente, sin que ello implique la ruptura del mandato popular ni la convocatoria automática de elecciones.
La ausencia forzada como supuesto excepcional
La ausencia forzada del Jefe del Estado no se encuentra prevista de forma literal en la Constitución. Sin embargo, el Derecho Constitucional contemporáneo reconoce que los textos constitucionales no pueden anticipar todas las hipótesis fácticas posibles, especialmente aquellas derivadas de hechos extraordinarios y contrarios al Derecho Internacional, como el secuestro de un presidente en ejercicio.
En estos casos, corresponde al intérprete constitucional preservar los principios fundamentales del orden constitucional, entre ellos: la soberanía popular, la continuidad del Estado, la estabilidad institucional y la eficacia del orden jurídico. La alternativa; considerar automáticamente la ausencia forzada como falta absoluta, equivaldría a premiar jurídicamente un acto ilícito internacional, lo cual resulta incompatible con el principio de supremacía constitucional.
El rol de la Sala Constitucional y la sentencia del 3 de enero de 2026
La Sala Constitucional del Tribunal Supremo de Justicia, conforme al artículo 335 de la CRBV, es el máximo y último intérprete de la Constitución, y sus interpretaciones son vinculantes para todos los órganos del Poder Público. Esta atribución no es discrecional: constituye una garantía de unidad y coherencia del sistema constitucional.
En la sentencia dictada el 3 de enero de 2026, la Sala reconoció expresamente que los hechos configuraban una situación excepcional, atípica y de fuerza mayor, que amenazaba la estabilidad del Estado y requería una respuesta inmediata. En consecuencia, dictó una medida cautelar urgente y preventiva, mediante la cual ordenó que la Vicepresidenta Ejecutiva de la República, Delcy Rodríguez, asumiera en condición de Encargada todas las atribuciones del Presidente de la República.
Es fundamental destacar que la Sala no calificó de manera definitiva la naturaleza jurídica de la falta presidencial, ni como absoluta ni como temporal. Tampoco sustituyó las competencias de otros órganos constitucionales. Su actuación tuvo como objetivo garantizar la continuidad administrativa del Estado y la defensa integral de la Nación, sin prejuzgar el fondo del asunto.
Por qué no hay elecciones presidenciales
Desde una perspectiva constitucional, no procede la convocatoria de elecciones presidenciales, ya que esta solo es obligatoria cuando se produce una falta absoluta del Presidente. Al no verificarse ninguna de las causales previstas en el artículo 233, cualquier convocatoria electoral en este contexto sería inconstitucional y atentaría contra el principio de soberanía popular, al desconocer el mandato vigente. Es claro que si el presidente Nicolás Maduro es liberado volverá a sus funciones como presidente hasta el 2031 y si continúa secuestrado, la encargaduría de la presidencia continuará hasta el 2031.
Además, aceptar que un secuestro internacional genere automáticamente un proceso electoral implicaría establecer un precedente extremadamente peligroso: que la voluntad popular pueda ser anulada por la fuerza externa.
El restablecimiento del orden constitucional
La solución constitucional es clara y coherente con el Estado de Derecho. Si el presidente Nicolás Maduro es liberado, retomará de inmediato el ejercicio pleno de sus funciones, y cesará la situación de ausencia forzada. Si la privación de libertad persiste, continuará la encargaduría constitucional ejercida por la Vicepresidenta Ejecutiva, Delcy Rodríguez, como mecanismo de preservación institucional.
En definitiva, el Derecho Constitucional no está diseñado para legitimar la fuerza, sino para contenerla. En momentos de crisis extrema, la Constitución no debe ser interpretada con oportunismo político, sino con responsabilidad jurídica, entendiendo que su finalidad última es proteger al Estado, al pueblo y a la soberanía frente a cualquier forma de imposición, interna o externa.
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02-07-26 savo
| carib... zambia... restructuring in 2023... new bond is 2035... there is also a weird Bond B which is longer but it also becomes 2035 if certain conditions are met...ie.. the kicker is the shortening of the bond... so i think it is reasonable to expect bonds shorter than 30 years. |
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02-07-26 carib
| Savo: I presume a restructuring presupposes a recognised debtor government.. or not? |
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02-07-26 savo
carib. the sri lanka restrucuturing closed in 2024 produced various kind of bonds with maturities: 2030, 2033, 2035, 2036, 2038.
All starting to amortize before the maturity date. |
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02-06-26 carib
| Savo: 20Y 4 step up to 5 and 6 + oil warrant.. could get close to 100, with 50% claim haircut. |
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02-06-26 savo
carib.. it is al speculation... but recent restructurings have come with much shorter maturities than 30 years...Ukraine in 2024 to 2036...Ghana to 2037... argie 2020 to 2035... etc...
30 years is not the standard anymore...
10 to 20 may be...
coupon... could start at 4... but I expect it to step up... |
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02-06-26 spal
CRS
CARPENTER TECHNOLOGY
366.63 (+5.16%)
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02-06-26 carib
| Savo: a Venezuela 2057 4% could trade around 60.. if yielding like Colombia... |
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02-06-26 spal
ALVOF
ALVOPETRO ENERGY LTD
5.49 (+4.77%)
Added - now watching
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02-06-26 spal
EZPW
EZCORP INC Class A
25.14 (+9.59%)
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02-06-26 spal
ALVOF
ALVOPETRO ENERGY LTD
Raised production ... raised prices ... micro NG producer in northern Brazil ergo a Schpal play |
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02-06-26 spal
| Bitcoin's bounce is keeping animal spirits in spec area running ... for now |
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02-06-26 spal
| EZPW ... pawn play ... currently stock is extended though |
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02-06-26 spal
| TBBB ... mexican retailer ... Aldi model ... rolling on upward. |
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02-06-26 spal
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02-06-26 spal
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02-06-26 spal
| Hence CRS = a fortress America play. |
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02-06-26 spal
Trump Ally Mullin Buys 10 Stocks, Including These $5 Billion Companies You've Probably Never Heard Of
06:31 PM CST, February 05, 2026
Sen. Markwayne Mullin (R-Okla.), who is a close ally of President Donald Trump, recently disclosed several stock purchases to kick off 2026. Unlike recent buys of Magnificent Seven stocks, the companies added to the senator's investment portfolio are significantly smaller this time around.
One was CRS
Mullin serves on the Senate Committee on Armed Services and several subcommittees, including those that deal with Airland and Seapower. |
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02-06-26 carib
| indeed it is, and as individual investors, we have to act in the context we are given.. |
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02-06-26 savo
spal... yes.. that is the case..
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02-06-26 spal
Savo - the reason for the negative real rates is simply and everywhere fiscal dominance. This is the reason and it is very difficult for this to be admitted because it is essentially political.
But it is non the less true. All over the world government spending in mostly transfers for entitlements has been excessive. Now the banks and the markets are forced to carry and roll this debt load over. Take the US - the deficit automatically expands now with higher rates and so that is why the system must be forced to carry the load in all its pockets and corners and that is why it must be done at negative or low real rates.
There is no alternative. |
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02-06-26 spal
Stellantis, the owner of Jeep and Chrysler, announced a “reset” of its business after its enormous investments in electric vehicles failed to pay off .
The company said Friday that it would take charges of more than $26 billion, the bulk of which includes write-offs and cash payments for canceled EV products and costs of resizing its EV supply chain. |
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02-06-26 carib
| Savo: that means avoiding to tamper with long term bond yields. |
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02-06-26 savo
for those interested in yesterday's bloodbath in silver... here a good summary:
https://www.youtube.com/watch?v=I_0PkF9KG0k&si=FrgZRkejEp_RB-A1 |
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02-06-26 savo
| carib.. yes you are right... but to be in the safe side let the market set rates... |
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02-06-26 savo
Valuation would depend on yield
i do not want to sound overoptimistic... but a veni firing in all oil and metals cylinders under US supervision... should not trade wider than el Salvador, Panama, Costa Rica, Honduras, Colombia, Uruguay......
that would be around 6%
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02-06-26 carib
| Savo: you are mixing apples and pears. A 2% rather than 0% inflation target is very compatible with positive real rates, and is probably the correct mix. |
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02-06-26 pillz
One number to start your day
$650 billion
That's how much Alphabet, Amazon, Meta and Microsoft plan to spend on data centers and AI gear in 2026. To find a comparable boom, you have to go back to the telecom bubble of the 1990s, or perhaps the build-out of US railroads in the 19th century. |
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02-06-26 savo
in an austrian model... where markets set interest rates... those clever enough will still be able to thrive even paying market rates which will be real positive... but nobody will have to pay the cost of a subsidy...
people would be able to choose between consumption today or more consumption tomorrow...savings would be available for those having clever ideas.. housing would be cheaper... there would be no money creation and thus no inflation.
that would be capitalism... and that would be how the economy works. |
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02-06-26 carib
Haircut of 50% on claim, 4% coupon + fat oil warrants... would cost 2BB a year in interest + a share of the oil profits.
Valuation would depend on yield, but clearly above current prices.
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02-06-26 savo
spal.. no offense taken.. i think this is an interesting debate...
if we understand capitalism as free markets...private ownership.. etc...
our economies are very imperfectly capitalist...a number of markets are intervened by governments in particular the most important one... the money market where the Fed and the ECB sets interest rates.
In this imperfections some thrive and some lose...
We all studied price controls at university... when governments control prices it is never to put them above market... it is always to put them below market. Those like Carib.. able to access that subsidized financing early... thrive... but that subsidy has to be paid by somebody else... in this case the ones that have to face higher prices in the economy as a consequence of inflation because they can not access that cheap financing early.
According to carib.. people do not care that he gets richer at the expense of those facing higher inflation.. because people can not notice 2% inflation (which we all know is not 2 but more like 5 to 8% but let's assume the 2% reported is correct)..as long as Carib invests that money and generates jobs.
The problem is not what people perceive.. most people are too dumb to perceive anything ...but what happens to people... and it is ""self evident" that the standards of living in europe and the US are falling for the majority of the people.
I leave the political consequences of that enrichment from subsidized financing for a later post... but suffice to say that this is not capitalism... and it is not how the economy works... it is how it is made to work by interested and powerful groups...it is not capitalism or a free economy... it is a rigged game where some close to power win while the majority loses.
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02-06-26 carib
Savo: I am in favour of positive real rates, not negative.
But I am not the chair of the FED nor the chair of the ECB.
My argument was that I side with Krugman on the point that 2% inflation is better than 0% inflation, because the average human.. is what he/she is. |
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02-06-26 pillz
The latest on crypto:
Bitcoin whipsawed in volatile trading on Friday. The token was up about 5%. Strategy and Coinbase gained 5% in premarket trading.
Crypto investors are turning to historical drawdown math, technical tripwires and liquidity gauges to map out their next moves.
Michael Saylor’s Strategy confirmed a net loss of $12.4 billion for the fourth quarter, driven by a sharp decline in the value of its Bitcoin holdings.
Retail traders who bought into Bitcoin at $90,000, $100,000 and $110,000, often via Wall Street-approved funds, face a reckoning.
JPMorgan strategists are out with a contrarian take: the coin is looking much more attractive over the long term than gold. |
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02-06-26 spal
| I think we often talk politics disguised as economics. Capitalists and cronies are often indistinguishable. That makes sense to me, but I can see how that might offend. |
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02-06-26 hann
02-06-26 savo
hann... FWIW.. i think things are moving very fast in veni
Having waited 8 years for Trump's U turn...why not wait a bit longer until a license is given to start restructuring talks
---
This is a valid point. I think Robinson is right also we have a higher floor now than before
I am leaning towards waiting. Thanks.
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02-06-26 savo
spal... under capitalism ... some people get richer while other people get poorer.
In crony capitalism... some people get richer because other get poorer.
Negative rates can only happen under crony capitalism. That is why the Fed or the ECB exist.
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02-06-26 savo
hann... FWIW.. i think things are moving very fast in veni
Having waited 8 years for Trump's U turn...why not wait a bit longer until a license is given to start restructuring talks.
a 50% haircut on total claim...an exit yield of 6 to 7% like most Latam... plus some oil warrants means a price of 100% to say the least. |
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02-06-26 hann
https://navnoorbawa.substack.com/p/how-hedge-funds-made-30-in-the-first
interesting detailed discussion of recoveries but 2nd hand.
Altana Credit Opportunities (Lee Robinson, CIO)
Entry: 2020 at ~6 cents (Bloomberg reported initial purchases at 6.25 cents; fund launch dedicated 100% to Venezuela)
January 2026: ~30% gain in the first few trading days of 2026 (Bloomberg reported)
Fund demonstrated high volatility through default period, with strong gains following October 2023 sanctions relief
Robinson’s conviction derived from prior asymmetric successes: 2008 subprime short, 2014 digital currency fund (+3,600% since inception per firm disclosure), and experience at Tudor Capital under Paul Tudor Jones.
----
Talking his book here:
Risk Framework: Why Post-Catalyst Entry Improved
Robinson’s counterintuitive insight:
“These bonds are probably a better buy today at 40 [cents] than they were at 30 two business days ago.”
Asymmetry logic:
At 30 cents pre-arrest: Downside to 15 cents on political failure = -50%
At 40 cents post-arrest: Downside to 30 cents (new floor after regime change) = -25%
Upside unchanged: 60–80 cents target in both cases
Result: Risk-adjusted expected value improved because downside floor rose faster than price.
---
Sell all, sell some or hold? Am now at cost, maybe a small profit if u include interest earned.
All i know is when I ask whether to sell or not price goes up. So i am asking again...
IMHO current prices imply higher expected recoveries. But all depends on how Donald feels about it.
Since US may strike iran, talks failed, that's another dimension |
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02-06-26 spal
"the problem is that while that makes you richer."
===
That does not sound like a problem then. Indeed the same can be said of a capitalist system in total.
And poor consumers, consuming ... by hook or by crook ... is a feature, not a bug. |
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02-06-26 savo
carib...negative real rates produced more investments, not less. with negative real rates the less prosperous section of the population tends to save and invest in their own home, because cheap mortgage rates allow that, and many other just consumed, rather than invest. But that consumption allowed companies that invested to find customers.
1) if negative real rates are good for the economy.. let's make them 100% negative... or 1000% negative.. or give every household its own printing press...
As an anecdote ..that is what peronism is all about.
2) with negative real rates some people buy a house..yes... but houses become more and more unaffordable making it impossible for younger generations to buy or even rent. If the government wants people to buy a home the job is to make them more affordable ...not less... and more affordable means cheaper... not more expensive. Again... Cantillon.
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02-06-26 savo
carib...As an "entrepreneur", I very much liked negative real rates,
of course you do... that is the equivalent of Trump sending putting checks in the mail...
the problem is that while that makes you richer... it makes the rest of the European population poorer.
from AI:
"The Cantillon Effect, named after 18th-century economist Richard Cantillon, states that an increase in the money supply does not impact the economy uniformly, but rather benefits those closest to the source of new money (banks, government, large corporations) who spend it before inflation drives up prices. It causes wealth inequality, as initial recipients buy assets cheaply, while later recipients face higher costs of living."
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02-06-26 victor
savo, now back to 65k.
somebody is buying this stuff.
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02-06-26 spal
| Yes Carib ... luckily the "average person" is the average person. |
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02-06-26 spal
Austria is not famous for producing a great form of capitalism, by the way.
Lol.
And yes Carib - good to see alignment here. I have to admit that calling the US economy bluntly "consumption driven" or more mildly "consumer driven" does somehow feel like sleight of hand, notwithstanding that it is totally correct. But here we are. |
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02-06-26 carib
PS: real economic and investment decisions are in practice greatly influenced by human psychology, which, as Kahneman scientifically and empirically proved, is far from being entirely rational.
Kahneman and Krugman did not get Nobel prizes because they were good looking or powerful.
So, the average person, which statistically is the relevant Joe, does not really feel a 2% yearly average inflation (which incudes some prices going down and slightly more going up), but if you ask him to get a 2% salary cut.. he is likely to go on strike.
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02-06-26 carib
Spal: in my opinion, your reasoning is correct, because in practice that is how the economy works.
Moving back to a micro example: I have been "saving" since age 5.
initially, I "saved" coins, because at 5 I had no bank account.
Later on, when the saved amounts became significant, and interest rates were high at the time, I started placing the savings in bonds, and re-investing the interest.
Further later on, I started investing the "savings" in developing real estate and in energy producing plants.
As an "entrepreneur", I very much liked negative real rates, because they allowed me to borrow cheaply, much increasing the profitability of investments.
Profits were again re-invested coupled with cheap borrowing, etc etc.
Bottom line: negative real rates produced more investments, not less. with negative real rates the less prosperous section of the population tends to save and invest in their own home, because cheap mortgage rates allow that, and many other just consumed, rather than invest. But that consumption allowed companies that invested to find customers.
So, from a micro to a macro level, the logic works.
Sorry for the austrians. Austria is not famous for producing a great form of capitalism, by the way. |
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02-06-26 victor
| from 60k to 63k in just a few minutes |
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02-06-26 spal
| Nasdaq and anything with momentum going to get smashed tomorrow. |
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02-06-26 spal
IREN ... former bitcoin miner trying to swing towards AI compute support ... utterly massacred in a/h trading.
There will be blood.
Gold and silver contuinuing to correct. |
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02-06-26 victor
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02-06-26 spal
Circle is squared as follows:
The disagreement you are circling is not really Keynesian vs Austrian. It is a confusion between microeconomic truths (which Austrians emphasize correctly) and macroeconomic mechanics (which exist whether one likes aggregates or not).
1. Aggregates are not ideology — they are accounting
Austrians often reject “aggregates” as fictitious. But aggregates are not claims about intentions or welfare; they are mechanical sums of individual actions. Aggreggating Savo is adding up across a class.
When millions of individuals decide to consume, save, invest, or lend, the cumulative outcome has consequences that cannot be understood by inspecting any single individual alone.
It would be otherwise incompehensible.
Saying “there is no national saving” is like saying “there is no river, only molecules of water.” True philosophically, useless analytically. Capital markets, balance sheets, and production chains operate at scale. Ignoring that does not make them disappear.
Like it or not Savo ... the US is an immensely rich country. Note this is not the same ... not the same ... as having a lot of poor or unrich people.
2. Consumption is not the policy lever — income is
No serious argument claims that “creating consumption” creates prosperity. Printing money and mailing checks does not generate real wealth unless productive capacity already exists. On that point, an Austrian critique is correct.
Where it goes wrong is confusing validation with creation.
Investment creates productive capacity only if it is profitable. Profitability requires demand. Consumption does not create capital, but it validates capital investment after the fact.
Without demand, savings pile up uselessly and investment collapses. This is not Keynesian ideology — it is observable reality in every deflationary episode.
3. Saving does not need to be universal to fund investment
The core Austrian claim — that prosperity requires saving and capital accumulation — is correct.
The false leap is assuming most individuals must save.
This Savo is utterly incorrect.
In the US:
The top ~20% of households generate ~80–85% of net financial saving
* Corporations retain earnings at scale
* Pension funds, insurers, and endowments intermediate savings
* The US absorbs foreign savings via capital markets
Meanwhile, the bottom ~60% of households save little or nothing, yet the system functions — and has for 70 years.
This is not a flaw; it is structural specialization.
Capital formation depends on concentrated saving, not universal thrift.
4. Prosperity of individuals is not a precondition for system function
Another error is smuggling in a moral assumption: that an economy requires broad individual prosperity to function.
It does not.
An economy can:
* Produce
* Accumulate capital
* Innovate
* Grow GDP
while a large share of the population remains financially fragile. This is not desirable, but it is empirically true. The US economy is not designed to make everyone prosperous; it is designed to allocate labor, capital, and risk efficiently.
This is how capitalism works. The rest is for socialist pamphlets and discussions at Fabian retreats.
5. How the US actually saves
The claim that the US “no longer saves” is false.
* Household net worth ≈ $180+ trillion**
* Corporate retained earnings remain high
* US capital markets are the deepest in the world
* The country absorbs global savings because it offers:
* Rule of law
* Liquid markets
* Scalable returns
This is saving — just not evenly distributed or primarily in bank deposits, which Austrians often overemphasize.
6. Interest rates, repression, and reserve currency
Artificially suppressing real rates can distort capital allocation — agreed. But “capital accumulation stops” is demonstrably false in the US case. What happens instead is capital reallocation:
* Away from low-return projects
* Toward scalable, intangible, and financial assets
Reserve currency status matters, but it does not replace domestic saving. It channels global saving into US capital markets, amplifying what already exists.
Bottom line
* Individuals save or do not save — true
* Investment requires saving — true
* But saving does not need to be universal - IMPORTANT.
* Consumption does not create capital, but it enables capital to earn returns
* The US economy works because saving, investment, and consumption are distributed across different agents.
This is not Keynesianism.
It is how a large, mature, financialized economy actually operates.
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