It's Going To Get Ugly

Guess Who They'll Blame? :)

It's dangerous to be right when the government is wrong. — Voltaire

The US Federal Government is now burning through $10 billion per day, with the national debt rising $1 trillion every 100 days.

We’re on pace to hitting $35 trillion of total public debt within the next 7-8 weeks. That’s $106’000 of debt for every man, woman, and child.

As bad as this sounds, it’s only going to get worse.

That’s because there’s a compounding effect. We’re now in the doom loop stage where money is borrowed just to pay the interest on the debt.

Here’s what it looks like:

20% of the entire national debt was added in just the last 3 years.

Zoom out further, and debt’s compounding effect becomes even more obvious:

It took 205 years for the national debt to cross the $1 trillion mark. That same amount is now being added about every 3 months.

Banks used to be tasked with keeping this debt structure afloat by absorbing government spending through Treasury bond purchases.

They no longer can perform this task.

That’s what last year’s slew of bank failures was all about.

The 10-Year Treasuries they’d been regulated into purchasing collapsed 46% between March 2020 and October 2023, wiping out the banks. These losses are comparable to the worst stock market crashes of recent history — when equities slumped 49% after the dot-com bubble burst and 57% in the aftermath of 2008. That may be fine for stocks, but not for government bonds. Remember, they’re supposed to be the safe-haven asset, the linchpin of the existing financial world-order.

The problem isn’t going away.

Rumors of another banking crisis are already swirling.

Shares of New York Community Bancorp, Inc. collapsed 20% on Thursday after disclosing "material weakness of internal controls." Incidentally, this is the bank that acquired Signature Bank after it was shut down by regulators in the last round.

Last Year, Treasury Secretary Janet Yellen famously declared the banking system sound, just as First Republic Bank received an emergency infusion of $30 billion, and Credit Suisse secured a $50 billion loan from the Swiss central bank. Similarly, President Biden assured the public that the banking system was “safe and sound.”

Safe and sound?

Nothing could be further from the truth.

The problem has reached such astronomical proportions that even central banks with their infinite money printers can barely hold the fraying financial system together. They’ve had to covertly inject trillions through liquidity swap lines and de facto bank bailouts like BTFP.

The initiated will understand that this is not a banking crisis. This is a sovereign debt crisis. The banking system can no longer support the debt debt structure, and so its function is that of frontman. In reality, the hot potato has now been passed one level up to the central banks. After this, there’s nowhere left to go, nowhere left to hide. The only remaining pressure valve is the currency itself.

If you’re reading this, congratulations.

You already understand this isn’t going to end well. You are part of a very small percentage that recognizes the iceberg and is leaving the Titanic.

But what happens next?

When people notice their life savings have evaporated, when pensions are too meager to survive on, when Social Security doesn’t pay enough to buy a bag of peanuts at the ballpark, when a hundred years of lies come bubbling to the top, do you think there will be a rational conversation? Will there be an admission of guilt by dilettante leadership? Will there be a recognition of the gross negligence and criminal incompetence that led us here?

Of course not.

You’ll be called an inflation profiteer for the crime of securing a lifeboat. Identity politics will become even more vicious and pronounced than they already are. Class warfare will be seen as a legitimate campaign platform.

There’s only one hope.

Get as many people into the lifeboat as possible.

That’s what this newsletter is about. If we can spread the word, we have a chance. We have the monetary technology to absorb the fiat debt bubble. It’s now about getting it into as many hands as possible before the ship goes down.

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