Zerohedge blares, Endgame: Interest On US Debt Surpasses $1 Trillion For First Time Ever:
“In a year when the monthly budget deficit was meandering along in the merry Chernobyl way,…someone in the Biden admin had the brilliant idea to spend a metric ass ton of money to reboot the economy so we don’t get a recession just in time for the elections. …. Government spending went into absolutely epic overdrive, as outlays hit a mind blowing $686 billion, the highest since March 2023.”
“.… the cumulative total for Fiscal 2024…just hit an all-time high of $1.049 trillion.
…. But wait, there’s more: the latest numbers confirm that we are well on our way to hitting our other forecast…of the US hitting an insane $1.6 trillion in interest expense by the year-end.
…. In other words, game over.”
Birch Gold tells us:
“The Senate unanimously approved a resolution…calling the debt ‘a threat to the national security of the United States’ and calling expected future budget deficits “unsustainable, irresponsible, and dangerous.”
The Great Debate – the game continues….
Bill Bonner’s article, Time to get serious explains:
“Neither candidate has any intention of squaring off against the big spending, parasite elites.
- Neither will balance the budget.
- Neither will challenge the warmongers.
- Neither will suggest to the Fed that it leave interest rates alone, rather than encourage more borrowing with a lower Fed Funds rate.
The idea of avoiding bankruptcy or preventing WWIII never even came up in the Great Debate.”
Friend Chuck Butler chimes in:
“Here’s the thing that’s been on my mind about the two Presidential Candidates and the economy… Both of them refuse to address the elephant in the room… And that is our Debt, and what they are going to do about it…. They won’t either, because both of them will add to the debt by whopping amounts…
And if you think that’s no Big Deal, we’ve added debt before…. Here’s something that should put goose bumps down your spine… The U.S. government will spend a record $1.2 trillion on interest payments in 2024, the highest amount ever recorded. …. And it just keeps getting worse, folks…”
Bonner adds:
“It’s an election year…when brightly-colored campaign promises fall to the ground like autumn leaves…and rot.
…. Tighten up — with spending cuts. Or loosen up — with interest rate cuts.
The first pill is hard to swallow. It causes immediate discomfort. The second is a happy pill — at least, for a while. It makes the bubble economy even more bubblicious. Neither candidate has any intention of taking the hard pill.”
RT Russian quotes Foreign Ministry spokeswoman Maria Zakharova, summarizing the Great Debate:
“Speaking on Radio Sputnik…she did not consider (the debate) a high-profile event. It mattered as much as the outcome of a hypothetical wrestling match on board the ill-fated Titanic….
‘Who do you think won? Why would that matter? The iceberg is 15 minutes away,’ she said.
…. She said neither Trump nor Harris intended to get to the wheel to change the course of the ship. America is on its way to a “total, global disaster” and the rest of the world is trying to prepare for it….
The debate itself…was a mixture of ‘fantasizing about the future’ and citing some facts about the past, with the candidates failing to agree on what those facts were.
‘We were given the latest show by people who apparently never ever take any responsibility for what they say.’”
Going down the drain….
The world knows what’s happening. Why would any country want to go to war when they see America and the dollar being destroyed from within. They don’t have four-year election cycles, they can wait; the US empire can easily crumble without firing a shot!
Nobody Gives A Damn….
Neither Bidenomics or Trumpenomics will ever work! Why?
| The “us versus them” charade is not democrats versus republicans; it is us, the citizens, versus them, the irresponsible government. |
While the cowardly senate passed a stupid resolution calling the debt a threat to national security, I don’t see any candidates for federal office proposing meaningful spending cuts. Instead, we hear no taxes on tips, overtime, special tax credits, you name it; buying votes with phony money.
Meanwhile the irresponsible political class ignores the real problems of spiraling interest on the ever-growing national debt. The politicians have spent us past the point of no return and, using my best Rhett Butler imitation, “Frankly don’t give a damn!”
Interest costs have been artificially low since the 2008 bank bailouts. The Heritage Foundation explains:
“(Current $trillion+ deficits)…issued at today’s interest rates, will increase the Treasury’s annual interest expense by over $100 billion.
…. Today’s relatively high interest rates affect much more than just current deficit spending. …. America doesn’t actually pay off debt, but only rolls it over. …. The Treasury simply issues new debt to cover repayment of what was originally borrowed, plus the accrued interest that’s due. How much debt is being rolled over in 2024? About $8 trillion worth.
…. We’re paying over $1 trillion a year just in interest on the debt.
…. This is already the federal government’s third-largest single line item in the budget.
…. Taxpayers would do well to ponder that point. We’re talking about interest payments, not schools, not roads or bridges, not hospitals, not the military and not Social Security—just interest. The government is increasingly digging itself into a hole which will eventually prevent it from funding any other expenses.
…. The desensitized public is unfortunately numb to the warnings, but they need to wake from their slumber because the day of reckoning is fast approaching.”
What now?
Pundit Bill Bonner touts the political choice is “inflate or die!” Inflation eventually spirals out of control and the debt is paid with worthless dollars.
Chuck Butler continues:
“I don’t think inflating the debt away is the way to go, because it would cause pain and suffering to everyone even the holders of our debt, for years…. But defaulting on our debt, not all of it, maybe give the holders of the debt a few pennies on each bond, would get our debt back to a reasonable level… Maybe…”
Those countries holding US debt have no appetite for either choice, inflation or default. Countries are setting up alternative payment arrangements for trade, circumventing the need for US dollars. In addition, they are unloading their debt holdings as quickly as they can, without disrupting the markets.
Apollo Academy explains:
“A decade ago, foreigners owned 33% of US government debt. That number has now declined to 23%.”
Chuck highlighted this Kitco article, Gold is the real de-dollarization play – Nassim Taleb.
“De-dollarization has become a trending topic amid the rising strength of the BRICS bloc and surging U.S. debt. But according to one analyst, while many are focused on competing currencies or digital assets, the real de-dollarization play is gold.
…. ‘People are not seeing the real ‘de-dollarization’ in progress,’ essayist and mathematical statistician Nassim Taleb said.
…. Luke Gromen, founder and president of Forest for the Trees, responded with the following chart, noting that ‘It’s quietly been underway for 10 years….’
…. The decision to freeze Russian assets after the country invaded Ukraine served as a wake-up call for those who held large portions of their reserves in U.S. Treasuries.
Geopolitical and financial analyst Angelo Giuliano (says) …. ‘Instead of buying US debt, countries are buying GOLD,’ he added.
…. ‘Between 1922 (Genoa Conference) and 1971 (Nixon shock), the Anglo powers removed physical gold as the international store of value. They replaced gold with government promises (banknotes, bonds, etc.), and the resulting debt-based system is extremely unstable, requiring ongoing quick fixes to not blow up.’
‘The US dollar Ponzi scheme is collapsing…the US exorbitant privilege to print endless amount of paper toilet currency is over. …. +30% yearly performance. Only the beginning.’
…. ‘The US will tout the USD’s high percentage use in trade all the way to the bottom,’ Turrin said.”
Chuck concludes:
“And NOW we know the real reason the Central Banks around the world have been buying physical Gold by the truckload…. And why does this matter to you? Because, as I always tell you… Follow the money… And the money has been chasing Gold for a couple of years now… If the Central Banks feel the need to own Gold, doesn’t that tell you that you should too? Got Gold?”
The Minsky Moment
What will trigger the Minsky moment? Will it be the government defaulting? Will hyperinflation kick in?
Perhaps the trigger will be external. The world is fed up with the US meddling in their affairs and Ponzi scheme phony dollars. Might the world’s big boys get enough gold reserves and announce they are done with the dollar? I suspect the Minsky Moment will be triggered by Russia and China (via the BRICS) working together.
Our political class will not give a damn, until it is too late….
No matter how it happens, Chuck is right. The world will go back to the gold standard and many will be scrambling…. Got Gold?
On The Lighter Side…
Last week Jo sent me a note that one of our favorite places, The Shell Factory in North Fort Myers is closing their doors after 86 years in business. When Holly was young, we loved riding their inflatable boats splashing each other.
Now I see a couple other favorite businesses, Tervis Tumbler and Tupperware have filed for bankruptcy. Sad to see them go.
I recently told Jo I need to get the trimmers out and cut back on the flowers around the house, they are starting to turn brown. She said “Noooo, they aren’t done yet!” Oh well, I decided to put it off and do it later. About a week later, she said, “Look at this!” Never said, “I told you so,” but she was right. I’ll confess several other plants also had some late blooms which were pretty cool. Glad I listened.
The remnants of Hurricane Helene hit southern Indiana last weekend. We went to watch Grandson Brock play tennis, the wind came up, lightning in the distance and it was immediately called. On Friday night they also cancelled the football games. Jo and I lived through many hurricanes when we lived in Florida and are strong believers in the line, “Don’t fool with mother nature!”
Quote of The Week…
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. Deficit spending is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.” — Alan Greenspan
And Finally…
Friend Chuck Butler sends along some “truisms” for our enjoyment:
- Getting old sucks. I used to wake up feeling like a million bucks…. Now I feel more like a bounced check.
- Can I order a replacement body please, this one is constantly malfunctioning.
- I’ll be posting telepathically today. If you think of something funny, it was me.
- I ordered a glass of wine and the waiter asked for my ID. I asked, “Do I look that young?” He said, “No, just want to see if you get the senior discount.”
- When I die I want my last words to be, “I left a million dollars under the…..”
- My wife tested me, “Your great.” I wrote back, “No, you’re great.” She’s been grinning all day. Should I explain I was just correcting her grammar?
- Men say women should come with instructions. Women say why? Have you ever seen a married man actually read the instructions?
- It’s a shame nothing is made in the USA anymore. My new TV says “Built in Antenna.” I don’t even know where that is.
- Posted a photo of my clean house and it was flagged and removed as “Fake News.”
And my favorite:
- I just posted a selfie and people told me to get well soon.
Until next time…
Dennis Miller
“Economic independence is the foundation of the only sort of freedom worth a damn.” – H. L. Mencken