by AGXIIK, TF Metals Report:
The Weimerica Republic, by AGXIIK
Bond Market Sell-Off Will Continue If U.S. Dollar And Oil Stay High | Luke Gromen – YouTube
I listened to this Luke Gromen video that spoke to how the dollar and US debt are in doom loops.
It is worth a listen if you want to get a feel of the basic math of what’s happening. All this is happening as the morons, drunken monkeys and fools in Congress passed a 45 day CR as one pulls a fire alarm to stop the process.
TRUTH LIVES on at https://sgtreport.tv/
Is he the hero in this Greek Tragedy, with his finger in the dyke shouting “Stop the fiscal insanity” or just another lost child?
I guess we shoved the fiscal reckoning cliff off by 45 days while the children running the show took the counselors prisoner and now run the camp.
My boneheaded take on things…
More US debt eats US liquidity. Banks cannot operate at these levels of competition for capital.
High rates means higher deficits which puts a huge hurt on the economy. Lower tax revenues means a shrinking economy means high deficits which leads to high rates needed to sell the scheisse debt to unwilling and foolish borrowers, a cohort that grows smaller by the day.
This leads to $4 trillion annual deficits, up from the present $2 trillion.
This leads to more debt and higher rates with less loanable capital to help power the economy which leads to negative economic growth that causes lower tax revenues and higher deficits.
Interest costs hit $2 trillion a year, moving rapidly to $3 trillion a year. How’s that 12 month T bill money market paying you 6% working out in a world of 10% inflation? If Moody’s drops America’s credit rating to A2, leapfrogging S&P and Fitch who linger longer at AA, mistaken in their belief that things will get better, will they?
That means 8-10% US debt rates which creates higher deficits that move to $6 trillion a year. Then we hit $50 trillion debt that leads quickly moves $100 trillion debt by 2040. The government cannot sell 10% rates to the investor market so it has to monetize the debt.
The debt become Worm Ouroboros.
Ouroboros – Wikipedia
Tails don’t make a good meal. Tail risk recedes in the rear view mirror as forward risk comes at us fastly and furiously.
This happens while global GDP is $100 trillion and growing at 3% or $3 trillion a year.
That happens when the US debt is $100 trillion, rising at 7% a year.
The entire global GDP growth is smaller by 50% than our annual deficit financing demands.
Who’s the laughing stock when Uncle Sam makes believe that there’s nothing to see here
And the world laughs out loud as Gulliver lets Lilliputians tie him down with ropes he sold them using actual dollars.
If the debt is the Road Runner we’re Wylie Coyote and the debt canyon is 1 mile deep.
Another way to view this is a fat duck moving slowly and serenely, sailing across the water while webbed feet whirl wildly, spinning like windmills in a hurricane
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