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Sunday, March 24, 2024



The Federal Debt in the US doubles every 8 years: that takes us to 100 trillion dollars of Federal debt in 2036.  That is 12 years from now for the mathematically challenged.  It is no different under Democrats or Republicans.  Everybody loves to spend.  Everybody also loves to talk about the deficit.  Nobody will evern touch it because it means sufferening through a recession/depression.  No politician will ever opt to do that.  Ever.  

Nominal growth of the US economy is dependent on Federal Spending.  Whether an administration attempts to offset that with tax cuts for the wealthy that are supposed to stimulate investment but just go into luxury purchases that result in much lower tax receipts that necessitate greater issuance of debt (the supply side economics farce) or whether an admnistration attempts to offset spending with debt forgiveness and social programs that are supposed to encourage investment but just go into yolo spending and results in the need to issue ever greater debt to pay for the programs (the middle class relief farce).

It doesn't matter.  It all results in more and more debt.

And the greater the debt the greater the debt service which necessitates more debt which demands more debt service (repeat ad infinitum)

What to do?

Well, at this point, nothing  Sorry.  But once debt becomes an overwhelming force in an economy it can only be wiped out by A) Default.  B) Hyperinflation.

Neither is a painless solution.

It doesn't matter if we are 97 percent of the way there or 98 percent of the way there (this is how much the dollar has been devalued since we left the gold standard in 1973.)  The last few perentage points can take 5 years or five months.

Meanwhile that's how long you have to prepare to protect your wealth.

So while the many are trying to figure out how to get the last few bucks out of AI or Fintech, the few are figurng out how to protect their wealth when the paper currencies finally inflate/deflate the last 2 to 3 percent which is where the devestation will occur.

And the best way to do that is Hard Assets that have stood the test of all previous inflation/deflation events: That is Gold, diamonds, Old Master Art and the like.

Better to be early than late.

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