Raoul Pal Discusses Economic Impact of Aging Population and Debt

According to Foresight News, former Goldman Sachs executive and Real Vision founder Raoul Pal has highlighted the economic challenges posed by an aging population. He explained that as the population ages, governments will need to borrow more funds to support GDP growth and manage debt interest payments. When debt surpasses 100% of GDP, the cash flow within the economy becomes insufficient to sustain debt growth. Consequently, debt expansion can only be achieved through the Federal Reserve's net liquidity, essentially 'printing money,' while regulatory measures compel banks to incorporate this into their balance sheets. This process leads to currency devaluation and reduces the real value of the 'denominator,' making scarce assets appear more valuable on the surface. Pal suggests that cryptocurrencies, particularly Bitcoin, serve as a lifeboat in this scenario. They not only offset the annual 8% currency devaluation but also appreciate due to adoption effects. Pal emphasized that these dynamics are crucial yet often misunderstood in macroeconomic analysis, and they are fundamentally linked to demographic structures. This has always been the case, he noted.