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Three Horrifying Facts About the US Debt “Situation”
Since too
often financial articles consist of some stooge blathering on and on with
opinions instead of facts, I thought today we’d simply focus on some FACTS
about our current financial system which few if any want to acknowledge.
#1: The US Fed is now the second largest
owner of US Treasuries.
That’s
right, this week we overtook Japan, leaving China as the only country with
greater ownership of US Debt. And we’re printing
money to buy it. Setting aside the fact that this is abject lunacy, this policy
is trashing our currency which has fallen 13% since June… as in four months
ago. Want an explanation for why stocks, commodities, and Gold are exploding
higher? Here it is.
#2: “There are only about $550 billion of Treasuries outstanding
with a remaining maturity of greater than 10 years.”
This
horrifying fact comes courtesy of Morgan Stanley analyst David Greenlaw. And it
confirms what I’ve been saying since the end of 2009, that the US has entered a
debt spiral: a time in which fewer and fewer investors are willing to lend to
us for any long period of time… at the exact same time that we must roll over
trillions in old debt and issue an additional $100-150 billion in NEW debt per
month in order to finance our massive deficit.
And only
$550 billion of the debt we’ve got to roll over has a maturity greater than 10
years!?!?
So we’re talking about TRILLIONS of old
debt coming due in the next decade. The below chart depicting the debt coming
due between 2009 and 2039 comes courtesy of the US Treasury itself. In plain
terms, we’ve got some much debt that needs to be rolled over that you can’t
even fit it on one page and still read it.
#3: The US will Default on its Debt
… either
that or experience hyperinflation. There is simply no other option. We can
NEVER pay off our debts. To do so would require every US family to pay $31,000
a year for 75 years.
Bear in
mind, I’m completely ignoring the debt we took on with the nationalization of
Fannie and Freddie, AIG, and the slew of other garbage we nationalized or
shifted onto the Fed’s balance sheet. And yet we’re STILL talking about every
US family making $31,000 in debt payments per year for 75 years to pay off our
national debt.
Obviously
that ain’t going to happen.
So default
is in the cards. Either that or hyperinflation (which occurs when investors
flee a currency). Either of these will be massively US Dollar negative and
horrible for the quality of life in the US. But they’re our only options, so
get ready.
Good
Investing!
Graham
Summers
PS. If
you’re worried about the future of the stock market and have yet to take steps
to prepare for the Second Round of the Financial Crisis… I highly suggest you
download my FREE Special Report specifying exactly how to prepare for what’s to
come.
I call it The Financial Crisis “Round Two” Survival
Kit. And its 17 pages contain a wealth of information about portfolio
protection, which investments to own and how to take out Catastrophe Insurance
on the stock market (this “insurance” paid out triple digit gains in the Autumn
of 2008).
Again, this
is all 100% FREE. To pick up your copy today, got to http://www.gainspainscapital.com
and click on FREE REPORTS.
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I wonder what the first largest owner of US Treasuries thinks of this scheme...
Would that be China?
In other words our government is becoming a Frankenstein version of Bear Stearns and Lehman, financing it's bloated toxic shit filled balance sheet with the sovereign equivalent of overnight repo money.
Stunning charts
with no one to bail them out
+1, Bear and Lehman were just innovators ahead of their time. Same with Enron.
Enron indeed lives, with the PE firms flipping their portfolio investments back and worth.
Right. So there's nothing to worry about because look how well the Bear Stears and Lehman problems turned out. Oh, wait...
""The US Fed is now the second largest owner of US Treasuries.
That’s right, this week we overtook Japan, leaving China as the only country with greater ownership of US Debt.""
WE didn't do any such thing. The Fed did it, not me, not you (unless you actually meet some of these folks on your daily rounds). The Fed is not the same as the people of the US, and don't get me started on the gubbermint. I doubt I will ever see Owebama or any congresscritter at my local farmer's market.
.
The Royal we man... Like I have certain new infor.... Listen man certain shit has come to light... I have new information, and like, this case is a lot more complex than you think....
Lewbowski knows all....CB
There are few situations in life that can't be effectively addressed with a Lewbowski line!
Can I pay that $31k x 75 yr debt now? I hate having bills hanging over my head.
Lessee, what's the present value of $2,325,000 . . .
Only the US government owes the money. Citizens that don't want to pay their share in the future can just leave. It's like running out on the check at the restaurant except it's legal!
Can't you just picture the look on the residents of Jaurez faces as "Gringos" start climbing over the fence to get INTO Mexico? :>D
the price of gold/ounce in 2085... ?
whatever the mutant bankster roaches says it is... duh ;-)
$1,850,000.
What is that in Zimbabwe dollars? I am looking at a $10 trillion note on my desk.
Please don't.
Wait and pay with Bennybucks. Then the NPV will work out to $1.39
+1
The best argument is simply an explanation.
Horror would somehow imply surprise.
I think you're thinking of terror.
Hand fused to the throttle, burning in!
MObama, MOproblems.
Leave the bumper sticker partisan J6P retardation at home please, this is a serious finance source.