I’m not a financial or economic expert. Let me admit that up front. But I can read the tea leaves and see that a disaster is looming. The U.S. government is currently engaged is the largest Ponzi scheme in history: issuing new debt to pay off old debt.
As of today, the U.S. government is saddled with $34 trillion in debt. My mind can’t even absorb that number. Of that $34 trillion, $7.6 trillion matures (meaning it comes due for payback) in 2024. And that’s just public debt. Another $800 billion in corporate debt matures in 2024, followed by $1.07 trillion in 2025.
Our friends in Europe are in just as bad a situation. The European Union has nearly 1 trillion euros (€) in debt coming due in 2024. And that’s just government debt. There is also about €4 trillion in European corporate debt coming due through 2025.
Can this insanity continue indefinitely? How long will the Ponzi scheme postpone the inevitable? The answer is “Not for much longer.” There has NEVER been a situation like this. At some point, both the national and international financial structures will collapse of their own weight of debt. What will trigger this collapse? Ultimately, it’s not inflation. It’s confidence in the government. And ours (the US) is rapidly burning through its “confidence account.”
When it reaches the point where nobody will buy government bonds to offset the debt, then the government goes bankrupt ― in other words, it defaults on its payments to debtors. What do you think THAT will do to the inclination of people (and other countries) to buy our debt (bonds)? China is already busy unloading existing US debt it has purchased (as bonds) over the years. Since 2021, they’ve gotten rid of nearly a third of all the US debt they’d previously purchased. In other words, they’ve stuck somebody else with the looming default.
If the government defaults on its obligations, what happens to Social Security and other financial entitlements? What happens to the expenditures of the Federal government on infrastructure and other services? What will happen in the streets of America when Social Security and welfare checks fail to come in?
“Well, the government won’t let that happen!” you say. Okay, so they print more money (not backed by tax revenues) to pay those checks this month and in the months to come. How long will it be before the dollar becomes worthless in commercial exchange?
I could go on, but you get the idea. It’s happening here in America, but it’s happening in Europe, too. And in some respects, the collapse there may occur first.
The moral of the story is: start paying attention to what’s going in in the financial world. And prepare yourself for the worst, which is likely to come to a head before 2030.