Jeff Booth Warns of Debt Deflation If Federal Reserve Keeps Hiking Interest Rates

The author of “The Price of Tomorrow,” Jeff Booth, has warned about debt deflation, calling it a “great depression on steroids,” if the Federal Reserve continues to hike interest rates. He believes that eventually the Fed “will be forced to pivot.”

Jeff Booth Warns About Danger of Continued Fed Rate Hikes

The author of “The Price of Tomorrow,” Jeff Booth, shared his thoughts in an Ask-Me-Anything session on Stacker News last week. Among numerous questions asked was whether he believes the recent Federal Reserve interest rate increases will actually cause widespread deflation. Booth replied:

If they keep hiking, it will ‘eventually’ turn into debt deflation — or credit wipeout. (ala great depression on steroids). Eventually, they will be forced to pivot.

“One important consideration for people is to think in terms of lag effect…ie 18 months from when actions are set in motion,” he continued. “Remember when no inflation, transitory inflation, high inflation,” Booth added, cautioning:

This tightening only really started in September and Fed only reduced their balance sheet by 2.7 % last year — with subsequent damage…. If they continue…..ugly.

Booth published a book titled “The Price of Tomorrow: Why Deflation is the Key to an Abundant Future” in 2020. In his book, the author explored “the problem of how to integrate the deflation brought on by technology into a system where inflation has been the norm,” according to the book’s overview. Booth believes “we can avoid a looming economic crisis if we can learn to embrace what abundance brings, which could even be a world without work.”

Booth has long been a proponent of bitcoin. He said in May last year: “Bitcoin will give individual rights and freedoms to the billions of people on our planet that should’ve had them in the first place.” The Price of Tomorrow author tweeted Friday:

We live in a world of abundance, bounded by a financial system built on scarcity. And while many don’t yet realize it because they are still trapped in the system requiring scarcity, bitcoin is the key that unlocks the abundance.

Do you agree with Jeff Booth about the Fed, debt deflation, and bitcoin? Let us know in the comments section below.

Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

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