Guest Post: Another Day Older and Deeper in Debt, by Gary Christenson

This post first appeared on The Deviant Investor.

Official US national debt exceeds $21 trillion. National debt increases over $3 billion per day.

Another day older and $3 billion deeper in debt!

The U.S. government pays the interest by issuing new debt. But that new debt increases total debt and (eventually) drives up interest rates, which requires more borrowing to pay the annual interest payments. Another year older and deeper in debt! A reset will occur when the debt load becomes too heavy.

WHY DEEPER IN DEBT?

Governments spend currency units, corporations demand their payoffs, the warfare and welfare lobbies own congress and the “borrow and spend” circus performs.

From Treasury Secretary Mnuchin:

“The real story is we made a significant investment in the military which is very, very important, and to get that done we had to increase non-military spending.”

The Deep State extracted its share of the swag, participants collected their payoffs and debt expanded. Borrow and spend is the lifeblood of the Wall Street and D.C. circus.

But it extends beyond Washington D.C. Consider these massive debt burdens in the U.S.:

  • Sub-prime auto loans. Defaults will rise in the coming recession.
  • Over $1 trillion in credit card debt. More defaults coming.
  • Over $10 trillion in mortgage debt. The 2008 recession hammered mortgage debt and related derivatives. The next recession could be worse.
  • About $1.5 trillion in student loan debt, much of which is deferred or in default. The next recession will illuminate the lunacy in this program.
  • Public and private pension liabilities are underfunded by many $trillions even though stock markets trade near all-time highs. The next recession will push many pension plans over the abyss.
  • U.S. government has unfunded liabilities of $100 – $200 trillion. Those liabilities increase every day and will be defaulted or paid in mini-dollars.

Summary: Congressional promises and boondoggles push the U.S. deeper into debt.

From David Stockman:

“That’s how the Warfare State-Welfare State system works, greased by the Deep State and its fetid ecosystem of bureaucrats, “think-tanks,” lobbyists, lawyers, pundits, carnival-barkers, grifters and other thieves.”

Another government contract, weapons system, wars, expanded welfare, free cell phones, ethanol subsidies, food stamps (SNAP), foreign aid to buy US weapons… and the circus descends deeper in debt.

BUT LET’S NOT TAKE IT TOO SERIOUSLY:

The Treasury Department issues bonds and sells them to the Fed. The Fed creates the dollars and buys the bonds. Insiders collect their swag, the government pays off corporations and voters, and those new dollars devalue existing dollars. Prices rise and the circus rolls down the road toward debt-ruin.

The game works until confidence in the currency and/or the Fed breaks. That confidence has not broken yet, but it will.

The dollars are mostly illusory. They are debts of the Federal Reserve. Bonds are promises to repay future mini-dollars by a government that can only repay via additional borrowing or printing. In a better world using real money, not fiat debt-based pretend dollars, the government would be a poor credit risk—a large chance of default.

That realization is coming. The U.S. needs a return to asset backed money that the banking cartel can’t create from nothing. This option is not politically viable in 2018.

Tennessee Ernie Ford sang about the plight of coal miners decades ago. Coal miners were often paid in company script which bought food and supplies at inflated prices in the company story. The “script” had no intrinsic value and was backed only by management promises. Silver coins – real money with intrinsic value—circulated in the United States while mining companies issued script. But script created more profit for mine owners.

“You load sixteen tons, what do you get?

Another day older and deeper in debt.

Saint Peter don’t you call me ‘cause I can’t go

I owe my soul to the company store.

Today we use “script” called Federal Reserve (digital and paper) Notes (debts), which have no intrinsic value and are backed only by promises from the Fed and the U.S. government. Labor is exchanged for debts from the Fed—the “Company Store.”

We use a flawed system that benefits the banker cartel, big corporations and the government. The system will not change without trauma. “I owe my soul to the company store.”

Our economy runs on low interest rates, credit and ever-increasing debt – auto loans, corporate loans, credit cards, mortgages, etc. Most retail transactions use plastic cards. The banking cartel takes their cut. Confidence holds the game together. But rising interest rates cut profits, increase debt service, and bankrupt marginal companies and households!

Another day older and deeper in debt. $21 trillion plus unfunded liabilities and rising $billions every day. If credit dries up, like in 2008, the piper will be paid in blood and bankruptcies.

Protect yourself from the coming reset:

  1. Reduce your debt load.
  2. Some retirement promises will not be paid.
  3. A reset is inevitable.
  4. Debt must be paid, defaulted or inflated away.
  5. Much of the debt can’t be paid.
  6. Default creates immediate and devastating consequences.
  7. Inflation and hyper-inflation are destructive but delay the consequences. Politicians like delayed consequences.
  8. Congress, the Administration and the banking cartel prefer inflation. Borrow and spend created inflation has worked for decades. The political and financial elite are unlikely to want change.
  9. Read Chris Marcus: Is the Price of Silver About to Explode?

Gold and silver are real money. They will retain their value and purchasing power as dollars are devalued, and will be safe assets during the coming reset, regardless of when or how it occurs.




14 Comments

  1. Gary Christenson’s explanation is one of the best summaries I’ve read. There could be an upside (for our children) to what seems like inevitable chaos and suffering coming our way. The flame of liberty could reignite in new republics.

  2. A good read. I personally expect a large war on or before 2025 as a “distraction”. The distraction will be required when the politicians are out of money and promises.

    If the thinking behind The Fourth Turning is accurate then we’d probaby come out of it by say 2030. To what? No idea.
    https://www.washingtonpost.com/entertainment/books/where-did-steve-bannon-get-his-worldview-from-my-book/2017/02/24/16937f38-f84a-11e6-9845-576c69081518_story.html?utm_term=.e9171cbdc4c8

  3. The U.S. is being bought and sold by our politicians and billionaires. There is zero reason for H-1B (and other catagories) workers and zero reason for jobs and industries to be off shored EXCEPT that it makes billions for the elite. Now we are deep into a concerted effort to replace old white voters of European descent with 3rd world immigrants who can be depended on to vote for the left. This is all planned and controlled with the intent to steal your retirements, homes, savings and income. If you don’t fight for your country you will lose it. The full takeover is closer than you think. A key component is they MUST take your guns because they fear (rightly so) a revolt of the silent majority once it becomes obvious that while they were enjoying their life someone stole their country. This is the biggest conspiracy in history and the MSM is complicit in keeping it under wraps. When this finally collapses it will either end in a purge or a revolution depending on one simple thing; were they able to seize most of the guns or not?

  4. Reminds me of the story about the farmer that taught his horse to eat saw dust. His neighbor asked him how the experiment was going.

    “Oh, it was really goin’ great ’till he upped and died… next thing I was gonna teach him was ta go without water.”

    Non-commodity based paper money is like saw dust. It’s really great until it’s not. Think of inflation and borrowing as a time machine. You go “back to the future” to get the money you need to spend now. This means everything will always increase in price. Eventually, you can’t go far enough into the future to get enough money because future money has been de-valued.

    The experts long ago decided there isn’t enough gold to back the dollars needed to service an economy the size the US was building. So they decided to dump gold and print money which represented the value of the output of industry itself… machines, and buildings, and tooth paste and pet rocks, etc. This is sort of like going down to the grocery store and buying food with the time sheet from your job ( “my company produced 10,000 pet rocks last week… I worked 40 hours… so, here’s my time sheet, give me that can of corn beef hash.”)

  5. Jesus said to be wise and innocent. Housing values tend only to track inflation. Stocks in going concerns represent values created by those companies by producing real products. Stocks may not do perfectly well in inflation, but they do better than a lot of other things! Her family basically quadrupled (or more) our money thanks to simple rebalancing & a bit of wise mutual fund investing during market crashes last 16 years— not hard to extract from those “fiat” 1’s and 0’s in retirementn accounts and convert into tangible items. Allows purchasing a fair bit of precious metals, politically incorrect long steel tubes, and short brass containers! Solar power systems have a higher return on investment than treasury bonds right now. Lots of Ways for the wise person to game their fiat system.

    1. Until the music stops and you are one left without a chair. You dollar-denominated IOUs will be worth nothing. It is a game of musical chairs- or chicken. Be the last one to get rid of the worthless assets before the game is over. But don’t hold them too long !

  6. M+ The Social Security fund has only IOUs. Pension funds? If Military pensions ever stop …it will be bloody. Big time!! Riots in France….nothing compared to what will happen here. Take my word.

    1. Military pensions will go with just a whimper,with much less than the “Bonus Marches” of the ’20’s did and a little more than the theft of the promised healthcare from a few years ago. No contract or promise from the goverment has any value.

  7. I’m ancient, but like prepperdoc, a few things don’t look so bad to me. With the exception of a small amount of silver, and stored gasoline gone bad, EVERYTHING I’ve purchased since 2008, is worth more now than when bought….some a LOT more. Having no debt, and lots of useable/tradable “things”, are the key. And the willingness to pay attention to our great grandfathers…in most cases. Bless all….

  8. So convenient to blame the politicians and the media, or whoever. Bottom line; we as Americans have become complacent and fat and lazy. As of today, we still have some ability to hold our “leaders” accountable, yet we squander this responsibility. Tomorrow will be another day, and possibly our opportunity to shape our destiny will pass. Shame on us for sleeping while the wolves are at the gate. Shame on us for becoming smug and complacent in our middle class subdivisions while our country is plundered.

  9. Please read Martin Armstrong’s many posts on the devaluation of gold and silver coins in many cultures in many centuries. He spent tens of millions of dollars of his own money researching this. And he provides plenty of photos of coins, and plenty of metallurgical analyses of them to prove it.

    Only China never debased their coinage. They never used gold or silver for coins at all.

    We are misled by our own history. Prior to the mid twentieth century, America never debased its coins, and by the time it did, you couldn’t buy much with them anyway – they were “small change.”

    England did debase its precious metal coins, but it was so long ago that we are ignorant of it.

    For 600 years there was no coinage at all in Europe. Japan debased its money so badly that people would only accept Chinese money. Gold and silver were for jewelry and for religious objects (the Bible says God created gold for ornament in the first place – look it up).

    Please read Martin Armstrong, who really does know what he is talking about in regard to this. Precious metal money is also fiat currency, since governments in debt simply inflate by debasing it, and have done so repeatedly for millenia.

  10. My mother always used to say “fretting only leads to wickedness.”

    Fiat currency, silver, gold…whatever.

    Let us put our trust in the Holy Spirit, who is promised to guide us forward. Our trust in family, friends, our knowledge, and our deep compassion will serve us well in any economic times.

    Carry on.

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