As many know I am no fan of the financial game shows and their “experts” that spout the party line that it is always time to BUY. One of the most unbelievable statements I have heard in a long time occurred on CNBC a few days ago.
Michael Rosen, chief investment officer at Angeles issued this statement:
“The question is, is this a systemic issue (regarding the record debt issuance of government, companies and individuals) Obviously, increased debt issuance is something to observe and continue to watch and be concerned about if it continues to get to levels of excessiveness. But we are not remotely close to that right now.”
This “expert” obviously disregards that over $40 TRILLION in admitted debt is causing a nearly $1.4 TRILLION interest bill in the last fiscal year. I guess the $2 TRILLION budget deficit funded with more debt is also of no concern and is not considered EXCESSIVE. On top of that, war, social security, Medicare benefits, and veteran’s benefits are also not included in those numbers.
At what point does the fact that this debt can never be repaid with the currency retaining even a fraction of its purchasing power reach the psyche of many of these so-called experts?
Keep in mind that I appeared on many of these shows and when it became obvious that I was interested in gold, silver, and hard assets the appearances became shorter and eventually the invitations stopped altogether.
To me, the fact that many of the people touted as “experts” likely do not dig deep enough for the truth or are willingly blinded by the “numbers” and propaganda that are being put out as news. This allows for not only bad information to be put out but also Misinformation to be touted as fact. Do not worry! We will just “print up” cash to oblivion- All is GREAT!
Anyone who does not think that the most indebted nation in the history of the world has also not reached a critical level of EXCESSIVE debt should really question their thesis.
The government debt is not the only problem here either. Many are questioning if the trillions being spent (mostly with new debt also) on AI will ultimately pay off or lead to a massive crash.
Cities, States, companies, and individuals are also drowning in EXCESSIVE debt. In fact, in many cases the only thing keeping many companies, cities, states, and individuals going is increasing debt at artificially low rates.
Add to the fact that we are “printing” trillions to give the illusion of solvency, the economic slowdown we are seeing is making the debt payments even harder to manage. This will likely lead to more “printing” as the chasm between our ability to service the debt and the actual exponentially increasing numbers require exponentially more “printing.”
Keep in mind that at some point the supplies that we have been storing will run out. In addition, the additional cash-conjuring will lead to far more cash chasing fewer goods. Supply and demand say FAR higher prices ahead! We will all get a lesson that printing money does not create ANYTHING, and it is NOT an answer to a supply problem which is what is staring at us straight on right now.
While searching for any good news I could find regarding the economy, I got quite a surprise. It is reported that the price of beef is finally showing signs of coming down after a massive increase in price. That is good short-term news.
The reason for the price drop is ANYTHING BUT good news. Because of the rising costs of inputs ranchers are selling off their herds. Just a few months ago a cow was selling for $2400.00. Recently, that same cow is fetching $900.00. The price of diesel, feed, fertilizer, etc. is making the costs associated with raising cattle uneconomical. The ranchers are deciding to sell now. This does not bode well for future prices as herds are being reduced and, in many cases, are not being replaced.
It is obvious to me that virtually all prices are being manipulated and that there are major changes coming shortly. Short of a full-blown destruction of demand, which would imply prices moving sharply higher so many could not afford to buy, or many people losing their jobs, as the “printing” continues prices will continue rising causing massive economic pain.
I still believe that after all is said and done most people will come to realize that the PRICES we have seen have no bearing on the VALUE that exists. Everyone appears to be an expert when “markets” are rising. As Warren Buffett has famously said, “When the tide goes out, we will see who has been swimming naked”. I believe that the majority of “investors” will be rushing for some shorts and tops.
The conjuring up of currency units in possibly hundreds of trillions of currencies have given “investors” a false sense of security. So far, the main effects have been felt by Main Street while Wall Street has feasted on lower rates and cheap margin.
My opinion is that the bond “market”, private credit, AI spending and AI IPO crashes in South Korea along with Japan in particular but many countries having to defend their currencies are flashing MAJOR signals that there is danger ahead.
I believe at the end of the day all that may be trusted is HARD ASSETS. History says gold will be needed to add some confidence back into the system as many, if not most PROMISES TO REPAY, will be exposed as being an illusion.
Even a country like the USA who can conjure up unlimited amounts of cash will have to make a choice. Continue “printing” and sacrifice the dollar and Main Street or stop and see an almost immediate repricing of assets that would likely paralyze the entire financial system- possibly for years.
My guess is they keep “printing” and use hard assets to pay down some of the debt.
This is a total paradigm change that needs to take place. Hopefully, there will be a plan that will head off a major problem.
Be Prepared!
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