The Fed decided to keep the overnight rate unchanged even though the Fed’s inflation “target” is far lower than the inflation taking place. They have NO CHOICE but to “print and buy” and that all else is nothing but noise.
Case in point- Many times I have written that debt is growing exponentially and this week gives us a LARGE clue that things are getting far worse.
Keep in mind that it took us 200 YEARS from George Washington to Ronald Reagan to reach $1 TRILLION in reported national debt. Actually, the “numbers” in the past were likely far more realistic than the propaganda” numbers” we get today.
Just this week the Treasury issued $326 BILLION in T Bills and $183 BILLION in Treasury notes. This is $509 BILLION (1/2 TRILLION) in just 3 DAYS.
While these three days may be extraordinary, let us look at a far better measure of where we are going. Keep in mind this is just what is “on the books.” No acknowledgment for wars, social security, Medicare, VA benefits, etc. You will see why this is important later.
Reported National Debt
1980 $920.8 Billion (Accrued since 1776)
1990 $3.1 TRILLION Up $2.2 TRILLION in just 10 Years
2000 $5.62 TRILLION Up $2.5 TRILLION in just 10 Years
2004 $7.9 TRILLION Up 2.28 TRILLION in 4 Years (AVG 5.7 TRILLION IN 10 YRS)
2008 $10.8 TRILLION UP $2.9 TRILLION in 4 Years (AVG 7.255 TR in 10 years)
2012 $15.8 TRILLION UP $5 TRILLION in 4 Years (AVG 12.5 TRILLION in 10 Years)
2016 $20 TRILLION UP $5 TRILLION in 4 Years (AVG 12.5 TRILLION in 10 Years)
2020 $27 TRILLION UP $7 TRILLION in 4 years (AVG 17.5 TRILLION in 10 Years)
2026 $40.5 TRILLION Up 13 TRILLION in 6 Years (AVG 21.6 trillion in 10 Years)
These numbers imply that the debt can never be repaid with our currency holding even a fraction of its value. The reason that I believe the “off the books spending” is so important is that it hides a lot of information from us.
According to the USDebtclock.org even though the Treasury issued $509 BILLION in 3 days of new issuance the “official” US debt only moved up about $100 BILLION. Where is the reporting of the other $400 BILLION?
Maybe there is a delay in reporting, but I do not know why that would be when the Treasury is providing the data. My guess is that the $400 Billion that was not reported was for “off the books” spending for war, etc.
It is imperative to understand that many cities, states, companies, and individuals are carrying massive amounts of debt that have the same characteristics but with a SIGNIFICANT difference. They do not have a mechanism to conjure up cash out of nowhere to give the illusion of solvency that the Federal government has.
This can has been kicked so far down the road that soon it will probably be impossible to kick it any further.
Just another reminder. Future promises may be met with massive disappointment. Those with the foresight to hold ASSETS rather than promises will likely fare FAR BETTER than those who expect that the Fed will always have your back and the US cannot default. Actually, we already defaulted on our “backed by gold” promise in 1971. We defaulted on our promise to have our currency be a form of settlement for ALL- not just those who we can bully. We are in the midst of a soft default again where the likely scenario is that those “in charge” will conjure up cash, pay what they said they would pay and we will be able to buy a Big Mac or Whopper when we thought we could eat for a month with the proceeds.
MANY historical examples exist and there is no question that it could, and likely will happen here. Unfortunately, the stars are aligning for just this type of outcome.
Be Prepared!
All information on debt and issuance is from USDebtclock.org and the US Treasury
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