Posted on 07/10/2022 7:50:57 AM PDT by DoodleBob
“because that debt that cannot be paid will not be paid.”
But it can be inflated away. Halve the value of the dollar and all of a sudden our debt gets back to being manageable. That is what they are doing right now.
It’s not good for Americans, but it does mean there is no chance of a default.
Great charts, thanks muchly for posting!
Excellent information. To many folks have no concept of how things work.
Would you marry the most attractive Antifa member?
Your presupposing that the American holders of wealth will stand by and let it wither away. I disagree. Certainly folks who don't know about wealth creation, i.e., the Kennedys, will likely go down the drain. But folks like that have financial advisors who earn a handsome living by reinvesting their wealth. Their own self-interest will guard against a contraction. And the Deplorables with wealth won't stand by as the destructive waves of capitalism (and cronyism) chase them.
To be sure, a balanced portfolio of financial assets, potables, and ordnance is wise. But that spiral acts a lot like Gadot.
As bad as Bidet et al are, they can’t make the US a fallen angel. There is too much good stuff we have AND too many people working productively.
Were those governments engaged in destroying the food supply and farmers, so we can eat factory-grown maggots and not beef?
All it takes is one or two ticks in interests to be paying a trillion dollars in interest. Do you think America is recoverable when 1/4 of its taxation is simply paying interest rates?
Structured finance isn't child's play, and for certain asset classes like subprime ABS I am certain even the agencies made assumptions that were, in retrospect, pretty bad, e.g. a $500,000 no doc mortgage loan to a nail salon worker will behave like a well-documented mortgage loan. That's not fraud...that's stupid.
Regardless, Moody's or S&P or Fitch or some Chinese Rating agency can say whatever they want about the US. Even if Moody's said the US was BB-, the fact remains that our 4% of the planet takes in a little more oil than we refine, mix it with our minds and labor, and disproportionately outproduce every other nation AND retain that wealth.
Circa 2013, These technically recoverable resources total 1,194 billion barrels of oil and 2,150 trillion cubic feet of natural gas that is owned by the federal taxpayer. At $100.00 per barrel of oil and $4.00 per thousand cubic feet of natural gas, the oil resources are worth $119.4 trillion and the natural gas resources are worth $8.6 trillion for a grand total of $128 trillion.
This would tackle the extinguishment of the debt AND unleash an energy wave of prosperity.
So it IS a problem BUT it's not TEOTWAWKI. They want you to think that way, though.
There is a large strain of defeatism that has overtaken a lot of Deplorables, and I totally get it. We had a pandemic, shutdowns, riots, election shenanigans, vaccine hysteria and an OSHA mandate/test-out "option." And I'm not Pollyanna- there are PLENTY of bad things out there.
But on top of the 6-3 OSHA smackdown, we just got three totally bitchin' SCOTUS opinions - Dobbs, NY State, EPA - and the wind is at our backs in terms of primary wins. The economy may turn down, but that's normal. And we will bounce back, as we 4% always do -it's in our DNA. FINALLY, I've seen TexasGurl24 go right at the Eeyors...it's great fun.
But based on some attitudes, you'd think it was 1979 and Carter was in charge (those were REALLY dark days, kids) or Hillary beat Trump in 2016 (that WOULD have been advanced darkness).
I'm sure SamAdams76 is sick of me saying it, but he reallly summed it perfectly when he said he went to bed election night 2016 feeling like he had terminal cancer, and woke up like he was in full remission. We have come too far as a nation, and I've seen too many buzzer beaters to give up, or give in to the Defeaticans.
Your mileage may vary. Thanks for listening.
Your presupposing that the American holders of wealth will stand by and let it wither away.
But we can both agree, there is a storm coming.
I have seen many a storm forecasts. A handful have panned out. For example, the week after 9/11, when I worked in NYC, the local leftist rag The Village Voice forecast that the govt would use the attack to quash civil rights. I remember thinking, derisively, "of course....just what I'd expect from the Voice." Whoops.
Rahm's "don't let a crisis go to waste" comment begot many a forecasts of the Obama Admin using the 2008 downturn to crank up govt. We got Obamacare.
On the other hand, as utterly despicable as was the pandemic, and notwithstanding the murder of nursing home patients in blue states and having to say gooodbye to loved ones over Zoom, we weren't welded into our homes or shot for not wearing masks. We all didn't die, and we weren't sent to re-education camps. The 2008 downturn didn't result in a World Government enforced by the blue helmets. Finally, the endless waves of terrorism I expected after 9/11, especially in the NYC metro area, never happened.
So, yes, I absolutely agree, there are gathering storm clouds. But the thing about about those clouds, is they also bring out Really Big Fans that, historically, do a great job of dispersing the clouds. The Carter years...well...that was like green rotating clouds. Then God gave us Reagan and we felt good again AND we started kicking ass militarily and economically. I thought Hillary was going to be President. Then God spared us again.
In my youth, everything looked like TEOTWAWKI. Nowadays, of course preparations should be made and scenario analysis does wonders for the mind and body. Hope isn't a business plan, and certainly I'm not arguing that we should be insouciant. But I'm done fearing the arrival of Godot.
I hope that makes sense. Thank you.
So, yes, I absolutely agree, there are gathering storm clouds. But the thing about about those clouds, is they also bring out Really Big Fans that, historically, do a great job of dispersing the clouds.
We have put off needed corrections and now the Invisible Hand will not be gentle.
We have seen a major world power go bankrupt in our life time. We are not exempt from that. In fact, we look a lot like that situation. But life went on after that demise, it was not the end of the world.
Only plan I can see is diversify, invest in people, find the right location as the storm will hit ALL ports but some will be safer than others. But which ones?
Survive for the rebuild?
As I write this, I need to invest more in Trump. If he doesn’t win, the wealth I have is gone. If he wins, there is still much work to do.
We are on the same page........................
There are about 35,000 food and beverage processing centers in the US. So far in 2022, there are 100 documented fires. Looks fishy.
But, in 2019, the number of fires at all manufacturing or processing plants in the country topped 5,300—nearly 15 a day. Additionally, more than 2,000 fires occurred in agricultural, grain and livestock, and refrigerated storage facilities, which could all include food processing operations.
Now, I don't put it past the Bidet Admin to torch private agricultural infrastructure. They are the party that stood down/by when Antifa rioted two summers ago. But even if this WAS what you theorize that it is, they're really bad at it.
As for the interest burden on the appx $22t of net debt held by the public and the $392bn in net interest expense, that's a blended coupon of 1.77%. And on page 34, we see the interest rate breakdown...the $12.6tn of Notes have an avg interest rate of 1.4%, and the $3.7tn of trills have a 10 basis point coupon. The interest rate in the other debt won't reset. Today's yield curve places tbills at 2.2% and the medium term matures at 3%. Per page 23, $6t of notes and all bills reset/mature over the next year. Net-net, that's $173bn in more interest burden in fiscal 2022.
That's a lot of money. But it's not trillion in interest. And in the short run, until the adults return to power, it's manageable.
Let’s hope so.
I know enough about history that things can seem stable until they suddenly aren’t.
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