This Has Never Happened Before...

Tyler Durden's picture

With debt ceilings, spending plans, and tax reforms focusing all eyes on Washington, we thought it notable that for the first time in US history, the cost of interest on US government debt has risen above half a trillion dollars...

 

Source: @NorthmanTrader

One wonders, given the grandiose spending plans, if we will ever get back below half a trillion dollars?

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troublesum's picture

When its 100% of GDP thats when the fun begins

nope-1004's picture

It likely is higher than anything stated, just that the insolvent banking cabal lie so fucking bad that the truth never sees the light of day.

 

NihilistZerO___'s picture

Not necessarily. Remember the FED owns more than half the outstanding debt. The interest we pay on that is returned to the Treasury as an accounting gimmick. If I remember how Operation twist worked the FED bought a lot of the older higher yield debt. So a big chunk of that 500B in interest is going right into the Treasuries coffers.

Cognitive Dissonance's picture

A million billion trillion here, a million billion trillion there, before you know it we're talking real <snicker snicker> money.

AVmaster's picture

No dude...

 

We are already past the point of critical mass...

 

Even if we were to stop all spending now and just pay interest on debt, it would still overrun us...

 

Where, when, and how does it all end? We already know that movie...

AlaricBalth's picture

The average interest rate on total interest bearing government debt is now at 2.277%.

https://www.treasurydirect.gov/govt/rates/pd/avg/2017/2017_04.htm

$10.4 trillion of the $20 trillion outstanding debt is in short and medium term bills and notes.

https://www.treasurydirect.gov/govt/reports/pd/feddebt/feddebt_apr17.pdf

If the Federal Reserve ever allows rates to normalize, interest on the national debt will skyrocket past $1 trillion.

https://www.treasurydirect.gov/govt/charts/principal/principal_debt.htm

Therefore the Fed can never allow rates to normalize.

Antifaschistische's picture

I agree.....until one day....when they have to allow rates to rise to stop massive capital outflow.   What triggers that?  I don't know....but intuition tells me, this practically zero interest rate experiment is not sustainable in the long term.

Whitness's picture

I agree with the math but why is it that the Congressional budget office says is only 1.4Trillion of 19.2 trillion gdp

 

https://www.cbo.gov/publication/52480

 

please help me understand

blindman's picture

what was it, a mere pittance, a drop in the bucket?
the ocean awaits. the open seas occupied by whales,
shrimp and microscopic feed. then there are mars and
jupiter to mine in the long scope of financiering outer-
space. cheer leading the imagination of man while
enslaving the poor fuckers has worked wonderfully for
the banksters so far. what could interrupt such a
'sublime' scheme; when will we ever learn such things?

peopledontwanttruth's picture

Yes you are right and that worked in 08, but remember the FED is and has lost credibility not just here in ZH but more importantly worldwide. The world is ready to give the FED and the USA a swift kick through the uprights.

max2205's picture

Sure it will. ...when they devalue the dollar 

WarPony's picture

No, it doesn't all go back to the Treasury.  The Fed keeps 6% (by law) as guaranteed profit (~$Billions), on top of and after they pay whatever they want to defer debts charged upon their cost-plus contract with the gov.  The profit gets passed off to secret (by law) shareholders.  It's a damn nice gig if you are in the club.

pie hole's picture

In that case, hookers and blow are on the house.

peopledontwanttruth's picture

Take a good honest look around you and nationwide-worldwide. They're laying off everyone and everything. This isn't by chance but rather by design. Health care, hospitals are closing and laying off doctors and nurses. Schools are laying off and closing by the droves. Food manufacturers are closing lines to plants. Not to mention but well documented and commented here on ZH, the housing sector and car industry are on a ventilator/life support (pull the printing presses and it dies in minutes to hours), so is much of other industries. They not only have stacks in the store aisles and their warehouses but even raw materials worldwide are sitting in warehouses to docks.

The plan is to create panic as people will submit to about anything for a handful of food. They'll beg for protection from the civil unrest that will look like a war zone. They'll give up everything and who they are and what they believe in just to have their garbage picked up again, their water turned on and to flush their toilets.

This is planned chaos coming as people will beg for the life they "thought" they had. We are heading to no man's land and a time that no one has EVER seen. No president or congress can fix this especially when they've been in on it ALL.

All the war talk we read of, is the final preparations of the world coming OFF the dollar. This Beast is not and will not go quietly into the night. Just as humans will tolerate people bad mouthing them or slandering them, but reach into their pockets is another story. This about countries reaching into the pockets of the globalist and American politicians and those they buy off around the world through puppet governments.

Keep the faith it's all we have. That is what we need to be banking and stacking.

http://www.dailyjobcuts.com/

sleigher's picture

If what you say is true, and (((they))) are as in control of things here as it seems, then it is game over.  Those fuckers won't hesitate.  Good thing I am 1 hour from my bug out location. (that shit don't matter either in the grand scheme)

*sigh*   Our people were fucked before we were born.   Our only hope is, well...  never gonna happen.

peopledontwanttruth's picture

Very very well put Sleigher, this process has taken decades and centuries to unfold but it's upon us for sure

yogibear's picture

Plus the Plunge protection intervened  today.  They cannot allow stocks to drop a lot.

HalinCA's picture

We are sooooo fucked

SHEEPFUKKER's picture

We are going to see a lot of "never seen before" things going forward. 

peopledontwanttruth's picture

We're going to see the worst of what man has to offer. All his animalistic traits will be exposed. Look how people act just to get a parking spot before you, get in line at an amusement park ride, butt in front of you on anything. Imagine when people haven't eaten for days to weeks.

new game's picture

from what i see they could go a month and be good. i really worry about the sugar withdrawl.

imagine hungry, sugar shakers.good news is they can't hold a gun steady...

peopledontwanttruth's picture

Yeah there's a lot of things that come to mind on the withdrawal part of it. All the food junkies and drug junkies to. Imagine all the people not getting their anti depressants who can't cope with life now. All the truly sick people such as the elderly who truly believed in Uncle Scam and have been left to hang out to dry. What's coming is something that we can't imagine or even write up with all the minds here on ZH.

SeattleBruce's picture

Yeah, think about when SNAP fails.  That'll unleash a desperate 45 million person strong FS army on society.

peopledontwanttruth's picture

Seattle so true. I didn't even think of that one while replying but the list goes on and on. When this baby pops they'll be able to hear it on the other side of the universe. There will things that all of us take for granted take won't be there. It will be a domino effect.

Archibald Buttle's picture

you guys need to have a red bull. it gives you wiiings!

Ring_Of_Fire's picture

shit out luck, hard wired to self destruct.

appealtoheaven's picture

Yes but adjust what  were paying 10 years ago for inflation. Our money just increasingly becomes more worthless, this means nothing. It's all smoke, mirrors, and pomp now friends 

peopledontwanttruth's picture

Soon LITERALLY toilet paper will be worth more

peopledontwanttruth's picture

My mother lived through that. Never wanted to talk about it while I was growing up. I would ask her about Germany during and after the war, in a look of terror she only would give me pieces of what it was like. I remember coming home from the store with her and said I'm starving, she stated you don't know starving. She said you're hungry. Then told me what starving was, not eating for 10-14 days regularly where every thought inn your aching body is food, to just get anything in your stomach. Headaches that wouldn't end, sleepless nights just thinking of food, you're so weak you can't move and you'll literally eat anything.

tuetenueggel's picture

If a Ford f 250 truck now is sold for 50.000 is this metal 5 times more valuable then 12 years ago or is it simply inflation. OK, Ford added lots of unnecessary gimmicks to it to make you believe it´s more valuable.

tuetenueggel's picture

It´s big european banks who need to be saved.

LetThemEatRand's picture

Given that the Fed is staying the course with more interest rate hikes (which will make the debt service number even higher), and given that tax revenue cannot possibly make up the difference leaving only Ctrl-P as the medicine, it's no wonder gold and silver are being clobbered.  

peopledontwanttruth's picture

Ole Indian in The Outlaw of Jossy Wells
"Hell is coming to breakfast"!

NihilistZerO___'s picture

It's not necessarily a net increase LTER. How many Treasuries from 2007-2008 will be coming off the books with higher yields than what will be in place even after the Fed raises a few more times. If the FED doesn't buy an equal amount then that's a net decrease in the balance sheet. And if those replacement Treasuries have a lower yield you're definitely looking at a decrease in interest payments.

LetThemEatRand's picture

I don't follow but maybe I'm missing something.  The debt is increasing year-by-year at a rate much higher than the interest rate differential on old debt vs. new debt.  Unless the Fed buys more debt (e.g., monetizes debt which I remember we were told doesn't happen) to offset the increase in total debt and thus total debt interest payments, those payments just keep going up, right?   Especially if interest rates are rising on the new debt.

peopledontwanttruth's picture

LTER, probably like a trucker run 2 or 3 sets of logs/books. At this point how could anyone believe one letter of a word on what they say.

new game's picture

faith, baby, faith. that is all they got in a system where we are all trapped. the money matrix.

seriously, i tried to buy a gun at a gunstore with silver. nogo. kinda blew my mind.

faith extends beyond the borders. and that is where the swan is incubating.

the real war will be one of taking out the dolla. then kiss good ole merica, bye bye...

peopledontwanttruth's picture

I've often wondered about that, all the people stacking. What will it truly be worth? If one can't buy with it now who will want it in the future. That saying comes to mind, an old useless relic???

SeattleBruce's picture

It'll be worth plenty at the right time, and especially when fiat fails - which it historically does.

peopledontwanttruth's picture

Unless they pull another 1933 and make PMs illegal to own, at that point what you own is a huge liability. Especially with so many here telling of their boating accidents. Even if you don't tell they're watching everything we do. Facial recognition everywhere. Everywhere we go being filmed. Nothing is normal or historical at this point.

The first manifesto on the Georgia guidestones wasnt carved to just look at.

PitBullsRule's picture

Check out Venezuela for the answer to that question.  When the economy goes hyper inflationary, people eventually realize they need to get rid of the money as fast as possible, before it loses its value.  They buy anything they think might hold its value.  Gold has been about the same for 5000 years, give or take a few dB, so the sooner you can trade the money for gold, the better off you are.  Problem is, who would trade gold for money that is devalueing overnight?  Nobody, so you can't buy gold.  So the price goes way up, but nobody trades, so the price doesn't matter.  So the gold is a way to bypass the devaluation of the currency.

tuetenueggel's picture

seems that you´re one of few to understand money.

TuPhat's picture

Dollar bills are legal tender.  Silver is not.  You shoulda knowed that.  The gun shop has to keep books on their sales and pay their bills in dollars not silver.  You should sell your silver to a coin shop and then buy the gun.  Thats how it works.  Or you could buy a gun from a private individual who is willing to barter.

Stormtrooper's picture

Yes, I've used the PM barter option several times.  Win-win.  No funny money exchanged.

tuetenueggel's picture

you know nothing. Dollar bills are printed green paper (shit).

Silver and gold are money. Time will come when you understand it.