GOLD AND THE DEBT BOMB OF 2024

 

Everyone knows that the US government is drowning in debt.  US debt including unfunded liabilities is at about 120 trillion dollars.  

But everyone also knows the US government owns the global printing press.  It is true that China,and Russia are leading an international coalition that now include some of the world's largest oil and commodity producing countries in developing bilateral trade agreements and perhaps even a commodity backed currency to settle trade outside the dollar.  But still the dollar is the world's reserve currency for the foreseeable future

BUT - many seem blissfully unaware that US publicly traded companies will have to refinance about a trillion dollars of debt in 2024 and another trillion in 2025.   This is debt they acquired at around ZERO percent that will now have to be refinanced at 6, 7, 8, 9 percent depending on the deals they can get from banks that are very reluctant to lend right now.  Banks whose own balance sheets are suspect.

The effect this will have on the Quadrillion dollar debt derivatives market is entirely unkown.  Because that market is over the counter, unregulated, and often poorly understood even by the experts who design and sell the instruments.

Debt and debt derivatives are now  in the portfolios of most of the nation's pension funds - both public and private.  If you think the managers of these pension funds have any understanding of the instruments they buy from the largest Private Equity Firms who market these things - well, I have a bridge in Brooklyn I"d like to sell you.

These companies and funds do not own a printing press.  They will go bankrupt unless the Fed bails them out.  Which means flooding the market with tons of printed dollars which will cause inflation to shoot to the moon.  Hyperinflation.

DEBT DEFLATION OR HYPERINFLATION.  Take your pick.   I know what the Fed will choose.

And the global Eurodollar market is comprised of over another 5 trillion dollars of dollar denominated debt, much of which was also borrowed near zero must be refinanced at much higher rates in the next two years.  And none of these other countries own a printing press that prints dollars.

A debt bomb is going to explode in 2024 and continue through 2025.

And the only thing I know that will protect you from this is gold