A once in a lifetime opportunity to what? Relive the fall of the Weimar Republic?
RE: A once in a lifetime opportunity to what? Relive the fall of the Weimar Republic?
I see it this way -— The defining issue of the last ~45 years has been the secular bull market in bonds. From 1980 until 2022, the yield on the U.S. debt (called Treasuries) was in a downtrend. In the very simplest of terms, this meant that throughout this time period, debt became ever cheaper to service.
As a result of this, every entity in the U.S. whether it be corporations, municipalities, and even the U.S. itself as a sovereign nation, went on a debt binge.
Today, there is there is $3.4 trillion in municipal debt, $14 trillion in corporate debt, $20 trillion in household debt, and $37 trillion in Federal debt outstanding. Throw in student debt, auto loans, and every other kind of future liability and the U.S. is sitting on over $100 trillion in debt.
All of these are problematic, but the SYSTEMIC issue pertains to U.S. sovereign debt.
It took the U.S. 232 years to hit $10 trillion in debt. It added its second $10 trillion in debt in just nine years. It added its third $10 trillion in five years. And at its current pace, it will hit $40 trillion in debt within the next 24 months.
To be clear, the U.S. has had a debt problem for years. That’s nothing new. What IS new is that the bull market in bonds, the macro setup that allowed the U.S. to issue all this debt is OVER.
For the first time in 45 years, it is costing the U.S. MORE to issue new debt (or roll over old debt).
So why hasn’t the U.S. entered a debt crisis yet?
Because these bonds have been consolidating since 2022. And the next move will determine whether the U.S. stays afloat, or the great debt crisis of our lifetimes is about to begin.
I say it’s time to invest in GOLD. THAT is the opportunity.