I suffered in the middle 1970's to the middle of 1980's with inflation causing my educational costs to soar and then interest rates to cripple my small business. It took 20 years for my net worth to build. As a youngster, houses in my parents' neighborhood cost $15-25k, in the expensive part of town the larger houses with larger lots sold for under $50k. Earning $4.50 was a great wage at Caterpillar which allowed a husband to buy a small house, have a family, and afford a used car.
Here in Frankfurt am Main, house/condo prices for quality and good location have tripled since I bought my condo and my wife bought a house and two apartments for rentals. We saved to pay for the properties.
If the inflation is gradually done, people will adjust and politically there won't be much discussion. I personally expect prices to be 3-4x to bring the debt/GDP ratio down to manageable levels. Anybody on a fixed income without Cost-of-Living increases will be squeezed.
Taxes for Government "Services" have increased and one has to be wary as to whether a university "education" is worth the price.
In summary, the financial situation for many Americans in 20 years will be far more difficult than when I was a kid. As a consolation, the US is in a better position than most European countries.
This is an excellent article and written simply enough for Billy Joe Beercan to understand. A copy should come with everyone's pay stub this week. I am just waiting for them to have a bond auction and no one comes to the party.
Here's something to consider. Many people buy by credit card and never pay down the balance. And they have no clue how much their buying power has been reduced because of the interest payments. Their idea of a balanced budget is if they can make the monthly payments. Apparently, that is the mindset of our congressmen.
A crisis is unavoidable. Social Security, Medicare , and entire complex of the welfare state will have to be eliminated as unaffordable for a bankrupt nation. Ditto for the Militarism Industrial Complex, its associated empire of bases, and it hyperactive, mass murdering interventionist foreign policy. The one silver lining in this entire fiasco. The only question is whether the crisis comes sooner or later. It is time for the USG to stop kicking the can down the road. The US national debt should be repudiated immediately. It will be repudiated by an honest acknowledgement of bankruptcy, or through an inflationary monetary policy (QE) with more severe consequences for the American people. The USG will continue to kick the can down the road and damn the more severe consequences to the American people
Fat chance that will ever happen. The USG will never acknowledge their responsibility for the impending crisis. The USG will never acknowledge that the impending crisis is due to their disastrous management of the nation’s finances and their criminally negligent fiscal irresponsibility. The USG will never take the course of action that would mitigate, but not eliminate, the consequences of their criminal negligence. I always have to remind myself that no matter how much I hate those bloodsucking vampires in the USG, I have to hate them more.
Not very many people hane noticed that Gold has sneaked up and down since 1971 from 35$ per troy oz, to now 2640$ despite the monthly smack downs around futures expirey.
Havent seen anyone make the case, that gold and silver are the PERFECT pension plans averaging 8% + per year in the last 50 years.
1 oz bought in 1971 sells now for more 75 times the 35$ price before 1971.
all this talk about what's gonna happen makes me really glad I'm not a can on the road. but srsly, when reality does introduce itself, hope and unity will get us through 🤣
The Deep State is attempting to dump the "Crack-Up Boom" directly in Trump"s Lap on January 20th. Unfortunately they may succeed. Be prepared accordingly.
Those people seem to think the Ukraine debacle is still "weakening Russia". Are they really that delusional? I'm afraid the answer is yes. If they can pin the bust on Trump it'll be just luck, not skill.
Someone may have to own the Crack-Up Boom's bust, that's for sure. I remember in 2016 Trump the campaigner called the market even at that time "a bubble". I wonder what he thinks now.
He may actually just ignore the bust and change the subject as the deficit goes ever higher. They ultimately may have to do a restructuring on the federal debt -- which I don't think would be all that hard to pull off. Mr. Bessent is the man!
Owned by foreigners: $7.9 trillion (Japan, Luxembourg, UK are $2.0 trillion)
Most private ownership in U.S. is banking/finance institutions and mutual funds (I think).
7.1 / 35 = 20% is government debt it owes to itself!
4.7/35 = 13% is owned by Fed
2/35 = 6% owned by friendly foreign govts.
That's 40% of all the debt!
With somebody like Scott Bessent as Treas Sec you think handling this in an old school "poltical economy" way will be hard? Ha! It may rattle some nerves but its nowhere near a sky-is-falling problem. And remember, all that social security and medicare/medicaid is money that goes right into the economy! It's like a tax cut every month. If you imagine all of that "economic activity" taking place in the private sphere, it's basically an economic engine.
Think outside the Buns! (of the butt). Can we have a bear market and have everybody blame the deficit. Yes! But will it really be the problem. no.
Ryan McMaken has written about as clear a description of what we face that I have seen. There is no magic wand to fix the damage done to our economy and our way of life.
Reality: $624 billion is an artifact of bookeeping
" . . .Taking into account last year’s inflated tax take and adjusting for calendar differences would leave the deficit for the first two months of this fiscal year essentially flat, a Treasury official said."
Reality: CBO's June 2024 estimate for 2025 budget is under $2 trillion vs. the "over $3.5 trillion" in this post's linear projection of "calendar differences"
Llet's not let reality in the way of budget lights-in-the-sky hysteria . . . party on! It's great to hit the dopamine button with a good Austrian Fix but God Forbid you actually try to make money this way. Ouch! The bond vigilantes died more than 20 years ago. Maybe they'll return some day, after Chicken Little has lost his money betting on doom & gloom that somehow never seems to happen except in 1929 and 2008/9 -- "normal" bear markets aside. (I speak from bitter personal experience, so nobody take offence!)
Aren't Meducare & SS paid for by the workers ofcthe country? Where did that $$$ go? And...what about that bloated federal bureaucracy? How many bureaucrats are really needed to run the country?
The Pentagon....?? Does this country really need 700 overseas bases?
We are stuck in the same mess that destroyed Rome and Great Britain.
I suffered in the middle 1970's to the middle of 1980's with inflation causing my educational costs to soar and then interest rates to cripple my small business. It took 20 years for my net worth to build. As a youngster, houses in my parents' neighborhood cost $15-25k, in the expensive part of town the larger houses with larger lots sold for under $50k. Earning $4.50 was a great wage at Caterpillar which allowed a husband to buy a small house, have a family, and afford a used car.
Here in Frankfurt am Main, house/condo prices for quality and good location have tripled since I bought my condo and my wife bought a house and two apartments for rentals. We saved to pay for the properties.
If the inflation is gradually done, people will adjust and politically there won't be much discussion. I personally expect prices to be 3-4x to bring the debt/GDP ratio down to manageable levels. Anybody on a fixed income without Cost-of-Living increases will be squeezed.
Taxes for Government "Services" have increased and one has to be wary as to whether a university "education" is worth the price.
In summary, the financial situation for many Americans in 20 years will be far more difficult than when I was a kid. As a consolation, the US is in a better position than most European countries.
This is an excellent article and written simply enough for Billy Joe Beercan to understand. A copy should come with everyone's pay stub this week. I am just waiting for them to have a bond auction and no one comes to the party.
Do you think a panic among investors/financial managers would ensure? Such events have happened before.
True, depends how bad the auction fails and we are in a more precarious situation now.
has already happened several times, then some Carrabien dark money + belgium mystery buyers steps in.
Here's something to consider. Many people buy by credit card and never pay down the balance. And they have no clue how much their buying power has been reduced because of the interest payments. Their idea of a balanced budget is if they can make the monthly payments. Apparently, that is the mindset of our congressmen.
A crisis is unavoidable. Social Security, Medicare , and entire complex of the welfare state will have to be eliminated as unaffordable for a bankrupt nation. Ditto for the Militarism Industrial Complex, its associated empire of bases, and it hyperactive, mass murdering interventionist foreign policy. The one silver lining in this entire fiasco. The only question is whether the crisis comes sooner or later. It is time for the USG to stop kicking the can down the road. The US national debt should be repudiated immediately. It will be repudiated by an honest acknowledgement of bankruptcy, or through an inflationary monetary policy (QE) with more severe consequences for the American people. The USG will continue to kick the can down the road and damn the more severe consequences to the American people
They should start with the trillion dollars that dissapears into the pentagon black projects each year.
Fat chance that will ever happen. The USG will never acknowledge their responsibility for the impending crisis. The USG will never acknowledge that the impending crisis is due to their disastrous management of the nation’s finances and their criminally negligent fiscal irresponsibility. The USG will never take the course of action that would mitigate, but not eliminate, the consequences of their criminal negligence. I always have to remind myself that no matter how much I hate those bloodsucking vampires in the USG, I have to hate them more.
Are these budgeted numbers? I think the amount that we are going into debt is even worse.
Not very many people hane noticed that Gold has sneaked up and down since 1971 from 35$ per troy oz, to now 2640$ despite the monthly smack downs around futures expirey.
Havent seen anyone make the case, that gold and silver are the PERFECT pension plans averaging 8% + per year in the last 50 years.
1 oz bought in 1971 sells now for more 75 times the 35$ price before 1971.
So, the TLDR version of that article is basically this: Nothing is going to change, we're all screwed, carry on.
Am I wrong?
You are correct.
all this talk about what's gonna happen makes me really glad I'm not a can on the road. but srsly, when reality does introduce itself, hope and unity will get us through 🤣
Great article. Anyone who has not watched the amateur hour we call government the last decade is in for a real shock and SOON!!
The Deep State is attempting to dump the "Crack-Up Boom" directly in Trump"s Lap on January 20th. Unfortunately they may succeed. Be prepared accordingly.
Those people seem to think the Ukraine debacle is still "weakening Russia". Are they really that delusional? I'm afraid the answer is yes. If they can pin the bust on Trump it'll be just luck, not skill.
Someone may have to own the Crack-Up Boom's bust, that's for sure. I remember in 2016 Trump the campaigner called the market even at that time "a bubble". I wonder what he thinks now.
He may actually just ignore the bust and change the subject as the deficit goes ever higher. They ultimately may have to do a restructuring on the federal debt -- which I don't think would be all that hard to pull off. Mr. Bessent is the man!
According to the most recent Treasury Bulletin
https://fiscal.treasury.gov/reports-statements/treasury-bulletin/
Total debt: $35 trillion
Owned by U.S. Gov: $7.1 trillion
Owned by Fed: $4.7 trillion
Owned by foreigners: $7.9 trillion (Japan, Luxembourg, UK are $2.0 trillion)
Most private ownership in U.S. is banking/finance institutions and mutual funds (I think).
7.1 / 35 = 20% is government debt it owes to itself!
4.7/35 = 13% is owned by Fed
2/35 = 6% owned by friendly foreign govts.
That's 40% of all the debt!
With somebody like Scott Bessent as Treas Sec you think handling this in an old school "poltical economy" way will be hard? Ha! It may rattle some nerves but its nowhere near a sky-is-falling problem. And remember, all that social security and medicare/medicaid is money that goes right into the economy! It's like a tax cut every month. If you imagine all of that "economic activity" taking place in the private sphere, it's basically an economic engine.
Think outside the Buns! (of the butt). Can we have a bear market and have everybody blame the deficit. Yes! But will it really be the problem. no.
Ryan McMaken has written about as clear a description of what we face that I have seen. There is no magic wand to fix the damage done to our economy and our way of life.
I predict the deficit next year will end up at $4 trillion or higher
Budget Drone Sightings??
Reality: $624 billion is an artifact of bookeeping
" . . .Taking into account last year’s inflated tax take and adjusting for calendar differences would leave the deficit for the first two months of this fiscal year essentially flat, a Treasury official said."
Source: https://www.bloomberg.com/news/articles/2024-12-11/us-deficit-widens-in-november-on-higher-health-defense-spending
Reality: CBO's June 2024 estimate for 2025 budget is under $2 trillion vs. the "over $3.5 trillion" in this post's linear projection of "calendar differences"
Source: https://www.cbo.gov/data/budget-economic-data#3
Llet's not let reality in the way of budget lights-in-the-sky hysteria . . . party on! It's great to hit the dopamine button with a good Austrian Fix but God Forbid you actually try to make money this way. Ouch! The bond vigilantes died more than 20 years ago. Maybe they'll return some day, after Chicken Little has lost his money betting on doom & gloom that somehow never seems to happen except in 1929 and 2008/9 -- "normal" bear markets aside. (I speak from bitter personal experience, so nobody take offence!)
Aren't Meducare & SS paid for by the workers ofcthe country? Where did that $$$ go? And...what about that bloated federal bureaucracy? How many bureaucrats are really needed to run the country?
The Pentagon....?? Does this country really need 700 overseas bases?
We are stuck in the same mess that destroyed Rome and Great Britain.
Are we next?