Quote of the Day
Currently, the US national debt stands at an unprecedented $34 trillion, fueled by extensive spending and escalating debt-servicing costs. Bank of America’s estimates, indicating that the US is accumulating an additional $1 trillion in debt every 100 days, underscore the urgency of the situation.
Rahul Kumar
April 5, 2024
Wharton Professor Warns Swelling US Debt Could Trigger Market Crisis by Next Year (msn.com)
On April 1st one ounce of Gold would buy an all time high of $2,264. On April 2nd it reached another all time high of $2,268. Yesterday it closed at the all time high of $2,341.49.
Prepare appropriately.
It would be bad enough if we were just printing it. Then cost would just go directly into goods and services.
But were borrowing it. So, $870 billion in interest and rising for 2024. And since the interest rate isn’t exactly fixed. The deeper you get, the more likely you won’t pay it back (risk), the higher the vig.
One has to wonder whom it is that is rich enough to loan us more money than the rest of the world combined, pretty much?
But the “Federal Reserve”, is a private banking corporation and unlike all other corporations in this country. They refuse to tell you who owns it. Or who the major players are in it. Other than the clowns out front under the fed chair.
Once one gazes pass the grabble of bond issuance and asset pricing. It’s not but a bullshit theft racket. So in your face no one can see it.
Inflation only benefits the inflator. For everyone else it a delayed tax. Or a way to steal your wealth without exactly putting a gun in your face. Although with 87,000 new IRS agents? Something tells me they ain’t adverse to that either. (The only way that could be worse is if they recruited from the Mexican cartels and used Chinese for management.)
We have been brainwashed to think paper is the object of value. It’s not. An OZ. of gold is an OZ. of gold. What it cost in dollars is a measure of how bad a shape your economy is in.
The leap and bound increase in price is how desperate people are to safeguard their wealth. Hard work and labor.
And remember it was not that long ago that the government stepped up and demanded everyone turn over their gold and silver in trade for the worthless paper. So, the precedence has been set.
And we should be under no illusion they wouldn’t do that again.
They’ve made the future quite simple though.
Soon, it’s all about who gets to eat lead, and who gets to eat beans.
We are past the point of no return economically. There will be no paying this debt.
What happens can’t be foreseen with certainty but what cannot continue will not.
The economy must “reset” in some fashion and history says that reset will likely be a collapse of some kind. And such upheavals economically invariably are accompanied by social upheaval, violence and usually open warfare. If you aren’t ready for that you aren’t ready.
$1 TRILLION in spending every 100 days would be bad enough; the number is sufficiently large that it’s difficult to visualize in practical terms. (And yes, I’m aware that our economy is bigger than that — $16-20 trillion per year, last I checked, or $1 trillion every 18-24 days — but it’s still difficult to imagine that much.)
But this is $1 TRILLION in spending beyond our means every 100 days. That’s nearly 20% over revenues! How long would a business or household last before declaring bankruptcy if they consistently spent 120% of their income? But as a nation we’ve done it year after year for the past couple decades!
The more time passes and the more the U.S. gets further and further into debt, the more I’m in favor of a “balanced budget” amendment to the U.S. Constitution. If it were up to me:
– Congress must pass a budget that’s within projected revenues, or the federal government gets zero revenues. Period. Full stop.
– The IRS, and any other federal agency, would be barred by law from collecting federal tax monies until/unless a budget is passed, and no backsies; they cannot collect in arrears or increase tax rates to make up for lost revenues if Congress is late with the budget.
– The federal government may not borrow more than 5% of the GDP in any given year, for any reason.
– If an emergency, natural disaster, war, budget shortfall, or something else happens, Congress may pass a rider for relief funds, explaining where that money is coming from — whether it’s redirected from other budget items or borrowed — and if it’s borrowed (subject to the 5% limit above), exactly how and when it will be repaid. No more indefinite “debt service” interest payments that don’t touch the principal, no more endless wars or objectiveless peacekeeping operations. (As an aside, when it comes to war, the military’s standing order must be to win — quickly, efficiently, and decisively — and “rebuilding” requires a separate budgetary line item from Congress. Our potential enemies would do well to keep this in mind.)
– The President would not be allowed to unilaterally redirect funds from one place to another via executive order; it would require approval from both chambers of Congress, starting with the House (as all spending bills must).
I could probably come up with some more stipulations to try and keep federal spending under control — and eliminate loopholes — but that’s a start. I might include an section saying that federal agencies and divisions that go without funding for more than two fiscal years are automatically eliminated, with an exception for agencies/divisions whose funds were approved by Congress but then redirected for emergency/disaster relief.
The long and short is, the federal government should be required to do the same budgeting and limited borrowing that a household or business must do to make ends meet. IOW, don’t spend beyond your means, don’t borrow more than you can repay (and have a plan to repay what you borrow), and if necessary, be ready and able to eliminate expenses and redirect those funds. The particulars are just to keep the various cogs in the government from cheating.
What do y’all think? Ideas and suggestions are welcome!
Opinions about bitcoin as a hedge against inflation?
I have a bias against crypto currency, so take that into account with what I say…
In inflationary times, especially hyperinflation, people sell (or try to sell) assets to get currency for food, rent, raw materials for manufacturing, etc. They sell in the order of things they can most do without to the most essential. Because nearly everyone is in need of currency the price of the assets being sold goes down. It crashes the stock market, house prices, etc.
My guess is that bitcoin would be sold before most other assets perhaps including stocks and bonds.