About a year ago, I wrote in a post that Americans would start taking notice in earnest regarding the ever ballooning national debt, once the interest payments alone surpassed $1 Trillion. I forecast we would see this number by the end of 2023 as the FED raised rates from near zero to 5.25 - 5.5% since April of last year. According to www.Statista.com, the U.S. government paid $724 Billion in interest on its debt owed in 2022. Because of higher interest rates, that number is set to hit $1 Trillion by the end of the year, just as I predicted. Actually, it wasn't a prediction, it was a mathematical certainty.
Not only are higher interest rates adding to the issue but also the constant borrowing. When I checked just last week, the national debt was bout $40 billion away from hitting $33T. Well, not a week has gone by and the national debt is over $33,040,750,000,000.00 and continues to grow with every passing second. Approximately $80 billion was added in less than a week.
The interest payments for this year will surpass the budget set for the Pentagon, which is over $800 billion. Now that's something that should catch everyone's attention, it will and soon! The problem that arises now is, what happens if and when we slip into recession. That means less tax revenue.
According to www.thebalancemoney.com, tax revenue for 2023 was projected to hit $4.71 trillion but get this. They also projected that revenue won't be enough to pay for spending and would result in a crushing $918 billion budget deficit. Those predictions were published in December, 2022. Did they project the continued rise in interest rates as well and how that would affect the overall amount owing? Probably not but we can see that they too had an inkling that we were headed for some kind of financial emergency, to say the least. Not only will there be this massive deficit for 2023 amounting to $1 trillion but also a debt payment amounting to the same thing. Together, they add up to $2 trillion.
Does that mean the amounting owing now is really $35 trillion? It does guarantee the U.S. national debt will hit this mark in short order and the higher the number grows, the faster it will grow. Anyone who's studied calculus will understand this. The rise becomes exponential until it can't rise anymore and implode on itself. Unfortunately, the 'exponential' part has already begun.
In 1929, a little less than 100 years ago, the U.S. national debt stood at $17 billion. Since then, the debt has grown by almost 20,000%. Let that sink in...
I think any smart person will understand what this is all leading too, the end of dollar hegemony. Every previous reserve currency went through the same thing. Just look at the British Pound, which was the reserve currency before the U.S. dollar. At the time, it had gold backing but they spend most of it financing their war effort during the Great War. The Bank of England took the pound off the gold standard in 1931. What followed was a depression, just like in the U.S.A..
Then came WW2 which ended with a new financial paradigm, the Bretton Woods Agreement. This agreement allowed the U.S. dollar to become world reserve currency and marked the end of the Pound as such. The dollar was partially backed by gold, making it 'partially sound'. Since 1971 though, the dollar is no longer backed by gold but only by the full faith and confidence of the U.S. Government. That confidence is waning.
Gold is an excellent marker to gauge the value of the dollar. As of writing, gold sits at $1,933 per ounce, a 572% increase since year 2000!
In the next financial paradigm, I have a really good feeling that gold will be part of the equation. Maybe that's why most central banks around the world are on a gold buying spree the likes we've not seen in the last 50+ years. Is a gold reprice on the way. I've suggested before that all that gold at Fort Knox is only valued at about $42 per ounce on the books. A repricing of gold seems natural and imminent at this point. All currencies have hit record lows against gold in recent times but did you know the Chinese Yuan and the Japanese Yen did so in the last few weeks?
Got gold? If not gold, then get your hands on some silver. Central banks and big money are scooping up all the gold. This morning, I got word from an email sent by Bix Weir of RoadtoRoota.com that big money has now begun scooping up mass amounts of silver. He alerted his followers that one family wealth fund has bought up 24 million ounces in SLV. If the wealthy buy up all the precious metals, what will be left for everyone else? Not a whole hell of a lot, that's for sure.
Including the massive 237 million ounce silver deficit that already exists, most people are already out of luck.
So, in conclusion, if the $33 trillion debt isn't enough to convince you that it's time to take action, then I'm sorry to say but you'll be left out in the cold. The best hedge against this monster is precious metals (and some Bitcoin too).
See references section for more information.
Peace and love to everyone!
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Previous Posts:
Japanese Yen hits record low against gold.
European Central Bank hikes again to record 4%.
Massive oil deficit next quarter signal higher gas prices!
Loose lips sink ships. Your co-workers are not your friends.
Central bank gold buying spree not slowing down.
Canada holds rates steady at 5%.
Oil prices in gold remarkably stable for last 70+ years.
M2 money contraction + rate hike double lag effect
Silver's massive 237 million ounce deficit
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