A nation can only afford so much debt. When the limits are passed... something’s gotta give. Either stocks crash and debt goes unpaid... or the money itself gives way.
Wow, $3 billion per day in interest on the national debt. I kind of knew that, but didn't really know it until I processed the facts. And much as it pains me to say it, we're talking about "real" money here, because it's an immediate obligation for transfer to the bondholders, either at home or abroad. In an accounting sense, the $3B comes straight out of govt cash flow. Every dollar paid in interest is one less pothole patched on an Interstate highway. And that $3B is meaningful in many other ways.; e.g... Nippon Steel wants to buy out US Steel, and the Japanese firm promises to invest... yes... $3B! into upgrading the furnaces and other tech of the aging Pittsburgh-based giant. Yet Biden-Harris AND Trunmp both oppose the deal, cuz... well... Reasons & stuff. Union-oriented politics, although the US Steel workers appear to favor the merger. And the campaign season Optics of a Japanese company buying an American icon with the letters "US" in the name. It's like Rockefeller Center going Japanese, 35 yrs ago. And this is just one $3B sack of dollars, paid in interest and not going into building real things; and alas, it's only Monday.
Why does Nippon Steel even WANT US Steel if it's not profitable? Maybe they know something we don't? There's no magic to profitability. What can Nippon Steel do that US Steel can't or won't? When the US owned the post-WWII economic monopoly, we could break the rules of economics and get away with it. Sooner or later, we have to get back to accepting reality. The US never did, and now we pay for the dalliance that became a flawed mindset and way of life. Best always. PM
Hmmm...."now we pay" you say. I would ask "how do we pay?" and will it be us ol' goats that frequent Bill's ponderings? Unfortunately, payment most likely will be through pain and suffering in the coming collapse. The elites think they are protected and many of the venal politicians think so too. Will they? - with just us lumprenproletariat proles receiving the pain of their delusions? Reviewing history it doesn't suggest they escape freely back into the salle des fêtes for another round of fun and frolick. ¿Quien sabe?
We pay for = get our comeuppance. Historically, the comeuppance is disproportionately borne by the masses, of which we are a part. Just the way I see it. Everything has a price. Best always. PM
just look at the total nincompoops we now elect to govern us and you can see why we're in this mess .. so how come Paul or Byron aren't running against such idiots ?
Exactly Altshule, we are given the two administrations that have printed up more money then all others total in the last century, and this current administration has done more damage to America and the world in our history. Now, make sure you go out and vote 😳
The money does not have to be fake to cause problems. In the 1500s, when the Spaniards introduced all the gold plundered from the "new world" into the European economy, inflation resulted, even though gold was then, and is now, real money. My old high-school math teacher said it best: "Gentlemen, your equations must balance." The real world does the actual math. Best always. PM
The question can be asked so what $3 billion interest payments, why not $20 billion? USA will simply print the $3 billion? The Fed's policy of "print baby, print" is for the benefit of the elites in government and their handlers. What better system then to rob those they swore to serve while converting fiat into valuable hard assets? This is akin a citizen to counterfeiting to pay their bills while the creditor gladly accepts the fraud. We might as well accept sea shells as payment, a shell might actually have more value than our dollar. This could go on forever as long as the rest of the world plays along. But alas I believe the creation of Brics is the pin coming for the Fed's balloon. So sure am I of this outcome it can be the only reason for the sanctions against Russia. Sanctions block the citizens of both USA and Europe from investing in Russia whom I believe will float a gold and energy backed Brics Ruble/Yen money. If they accept the USD in trade for pennies on a dollar (true value) they will in fact be able to buy up the USA at a massive discount. Hello WW3.
It's not hard to figure something has got to give. My morning stroll through one of our local retail and office complexes I noticed 2/3rds of the store fronts sporting for rent signs. How many vacancies will cause the owner to default on the mortgage?
The last time I was in a similar situation, borrowing massively on as many of my properties as I was able resulted in the lenders treading lightly, I was holding a big stick. Sitting with near zero equity in any of my properties, and still paying the notes on time. When the smoke cleared the lenders made the decision to extend the terms on the 5 year notes. While most of my fellow investors lost their properties to foreclosure, the lenders saw equity they could seize and make up the difference selling the property. This time around I'm cashing out of all indebted properties and moving the loot over to gold/silver and better rental assets that are not effected by the destruction of the middle-class.
I did the math: it works out to $8.8 in interest per day for every man, woman, and child citizen in the country. For a family of four that’s $12,882/year in extra costs (taxes) they would have to pay just to break even with the current debt payments. On top of all other taxes, inflated prices, etc.
But as I have said many times, what they are really doing is sawing off the limb they are sitting on. The “après” part will include them(the billionaires and overlords) as well, although I think they believe they are sheltered from it. The shock will come when all of THEIR technology and supply chains fail them.
Good stuff Bill! I too have lots of questions. Most of us can run the numbers on gold/dow, gold/30yr bond, p/e and so on - the math does't lie, or does it?
The questions I have are not why its happening and why are we loosing sleep over gloom and doom we have no control over.
My reasoning is why hang around and wait for the forecasted disaster to strike? Why not go as you did to locations where the dollar still has value and life treats you better.
Say's Law has caveats - I spent the last week in my China home and enjoyed all the benefits of a strong dollar. A trip to the hardware store and $25 yielded a large bag of home goods which in my estimates would cost $70 at Lowe's. I will bet too that the Chinese merchant has a higher profit margin than Lowes. If true, did my $25 purchase add more value to the world economy than my $70 purchase at Lowe's?
With fake money you get fake numbers and fake value. Meanwhile your daily reading of those numbers are mostly exaggerated guesses.
Yes, we will all cross over in time. In the meantime I am doing it 15000 steps / day and making sure the pathetic dollar buys me the best lifestyle possible.
Don't sweat the impossible dream of righting what our so called patriots in DC have destroyed.
Bill great recap of how little problems & discretion's become bigger problems and debauchery today .. for all those younger souls who've maybe just woken up from their dreams of reality this is a good wake-up call .. for the rest of us old farts its just history sadness and remorse at watching is all happen and not being able to change it .. like Dr Ron Paul threaten to do but you to failed to act ...
The US is NOT paying $3 000 000 000 per day in interest it is accumulating that amount on top of debt it continually borrows daily to fund itself. If it was actually paying the interest it would have to come from some expenditure cut in government and the US would be in recession/depression Territory … at least as measured by GDP. And, all this before the November election … the biggest auction of stolen goods in the history of mankind. Not looking good!
I am told our trading partners do not want our dollars thus we are seeing dedollarization . Sell those U.S. bonds and buy gold and that is just what they are doing. In the meantime gold is on a tear which means the dollar is getting clobbered. ( declining dollar} People need to determine which cave they want to live in and do it soon. God' blessings to all.
If I am correct, and please correct me if I am wrong, the US worker, not including government payroll, for all his toil, creates $27.3T in products and services (GDP). They pay $6.4T, or 23.44% of this reward for the privilege of their elected representatives to create for them $33T of debt ( and growing daily in interest and funding for wars and border security and civil protection, etc.), they think we need for a better lifestyle. So, where are the added benefits of this debt? Based on studies presented to us by our dear BB ( Bill Bonner, not Big Brother :-) ), This borrowed largess has not, in fact, reached the working prole. The working prole himself has borrowed an additional $17T to eke out his better lifestyle, as well as $4T in state and local taxes. It has, however, lined the pockets of the cabal, political elites, industrial elites, education elites, msm elites, foreign friends, and the list goes on. Do you think if the common prole knew about how this is destroying him, he would change his voting habits? I think it would. But, all possibility of that happening has been leeched out of our system. Welcome to 1984! Just to remind you, please watch the comedy Tuesday night. It will be a sublime comedy. Don't forget to vote!
I think we all need to go out and buy the shares of the companies that build printing presses, make paper, and bottle all that ink that we’re going to need🤪
Why is supply finite? It seems like China, India, etc. are willing to give us all the supply we want? Supply does not seem to be constrained, because foreign nations will produce whatever we want to buy in abundance. Does this limit inflation?
Depends on how you look at it. Actually, what it does is lessen the impact of inflation. The only thing that can limit inflation is to balance demand dollars more closely to supply output. If some supplier is willing to sell more cheaply to meet demand, then the effect of our imbalance is dampened. This is how we "avoided" inflation when China started flooding the country with its cheaper goods. Acquiring product more cheaply from China allowed us to have more of our output go to things causing the inflation, meaning not having to run such high deficits to finance vote-buying. Best always. PM
Wow, $3 billion per day in interest on the national debt. I kind of knew that, but didn't really know it until I processed the facts. And much as it pains me to say it, we're talking about "real" money here, because it's an immediate obligation for transfer to the bondholders, either at home or abroad. In an accounting sense, the $3B comes straight out of govt cash flow. Every dollar paid in interest is one less pothole patched on an Interstate highway. And that $3B is meaningful in many other ways.; e.g... Nippon Steel wants to buy out US Steel, and the Japanese firm promises to invest... yes... $3B! into upgrading the furnaces and other tech of the aging Pittsburgh-based giant. Yet Biden-Harris AND Trunmp both oppose the deal, cuz... well... Reasons & stuff. Union-oriented politics, although the US Steel workers appear to favor the merger. And the campaign season Optics of a Japanese company buying an American icon with the letters "US" in the name. It's like Rockefeller Center going Japanese, 35 yrs ago. And this is just one $3B sack of dollars, paid in interest and not going into building real things; and alas, it's only Monday.
Why does Nippon Steel even WANT US Steel if it's not profitable? Maybe they know something we don't? There's no magic to profitability. What can Nippon Steel do that US Steel can't or won't? When the US owned the post-WWII economic monopoly, we could break the rules of economics and get away with it. Sooner or later, we have to get back to accepting reality. The US never did, and now we pay for the dalliance that became a flawed mindset and way of life. Best always. PM
Hmmm...."now we pay" you say. I would ask "how do we pay?" and will it be us ol' goats that frequent Bill's ponderings? Unfortunately, payment most likely will be through pain and suffering in the coming collapse. The elites think they are protected and many of the venal politicians think so too. Will they? - with just us lumprenproletariat proles receiving the pain of their delusions? Reviewing history it doesn't suggest they escape freely back into the salle des fêtes for another round of fun and frolick. ¿Quien sabe?
We pay for = get our comeuppance. Historically, the comeuppance is disproportionately borne by the masses, of which we are a part. Just the way I see it. Everything has a price. Best always. PM
just look at the total nincompoops we now elect to govern us and you can see why we're in this mess .. so how come Paul or Byron aren't running against such idiots ?
Exactly Altshule, we are given the two administrations that have printed up more money then all others total in the last century, and this current administration has done more damage to America and the world in our history. Now, make sure you go out and vote 😳
They know better. Thanks for the endorsement. Best always. PM
Have you seen Doomberg’s very bearish outlook on oil/natural gas?
https://youtu.be/B4l6S4waXjY?feature=shared
The money does not have to be fake to cause problems. In the 1500s, when the Spaniards introduced all the gold plundered from the "new world" into the European economy, inflation resulted, even though gold was then, and is now, real money. My old high-school math teacher said it best: "Gentlemen, your equations must balance." The real world does the actual math. Best always. PM
The question can be asked so what $3 billion interest payments, why not $20 billion? USA will simply print the $3 billion? The Fed's policy of "print baby, print" is for the benefit of the elites in government and their handlers. What better system then to rob those they swore to serve while converting fiat into valuable hard assets? This is akin a citizen to counterfeiting to pay their bills while the creditor gladly accepts the fraud. We might as well accept sea shells as payment, a shell might actually have more value than our dollar. This could go on forever as long as the rest of the world plays along. But alas I believe the creation of Brics is the pin coming for the Fed's balloon. So sure am I of this outcome it can be the only reason for the sanctions against Russia. Sanctions block the citizens of both USA and Europe from investing in Russia whom I believe will float a gold and energy backed Brics Ruble/Yen money. If they accept the USD in trade for pennies on a dollar (true value) they will in fact be able to buy up the USA at a massive discount. Hello WW3.
It's not hard to figure something has got to give. My morning stroll through one of our local retail and office complexes I noticed 2/3rds of the store fronts sporting for rent signs. How many vacancies will cause the owner to default on the mortgage?
The last time I was in a similar situation, borrowing massively on as many of my properties as I was able resulted in the lenders treading lightly, I was holding a big stick. Sitting with near zero equity in any of my properties, and still paying the notes on time. When the smoke cleared the lenders made the decision to extend the terms on the 5 year notes. While most of my fellow investors lost their properties to foreclosure, the lenders saw equity they could seize and make up the difference selling the property. This time around I'm cashing out of all indebted properties and moving the loot over to gold/silver and better rental assets that are not effected by the destruction of the middle-class.
Not only do they prevent us from investing in Russia, they stole what we had already invested there before the war.
Brilliant Mr T!
I did the math: it works out to $8.8 in interest per day for every man, woman, and child citizen in the country. For a family of four that’s $12,882/year in extra costs (taxes) they would have to pay just to break even with the current debt payments. On top of all other taxes, inflated prices, etc.
And the cost is going up every minute 🤔
‘Après nous, le deluge’ is surely their motto.
But as I have said many times, what they are really doing is sawing off the limb they are sitting on. The “après” part will include them(the billionaires and overlords) as well, although I think they believe they are sheltered from it. The shock will come when all of THEIR technology and supply chains fail them.
I would like to know who "moved my cheese"? I think someone ate it.
We ate it, because someone told us there'd always be more, and it would be "free" as well. Best always. PM
Mmmmmmm - gubiment cheese....
Good stuff Bill! I too have lots of questions. Most of us can run the numbers on gold/dow, gold/30yr bond, p/e and so on - the math does't lie, or does it?
The questions I have are not why its happening and why are we loosing sleep over gloom and doom we have no control over.
My reasoning is why hang around and wait for the forecasted disaster to strike? Why not go as you did to locations where the dollar still has value and life treats you better.
Say's Law has caveats - I spent the last week in my China home and enjoyed all the benefits of a strong dollar. A trip to the hardware store and $25 yielded a large bag of home goods which in my estimates would cost $70 at Lowe's. I will bet too that the Chinese merchant has a higher profit margin than Lowes. If true, did my $25 purchase add more value to the world economy than my $70 purchase at Lowe's?
With fake money you get fake numbers and fake value. Meanwhile your daily reading of those numbers are mostly exaggerated guesses.
Yes, we will all cross over in time. In the meantime I am doing it 15000 steps / day and making sure the pathetic dollar buys me the best lifestyle possible.
Don't sweat the impossible dream of righting what our so called patriots in DC have destroyed.
Enjoy
Bill great recap of how little problems & discretion's become bigger problems and debauchery today .. for all those younger souls who've maybe just woken up from their dreams of reality this is a good wake-up call .. for the rest of us old farts its just history sadness and remorse at watching is all happen and not being able to change it .. like Dr Ron Paul threaten to do but you to failed to act ...
The US is NOT paying $3 000 000 000 per day in interest it is accumulating that amount on top of debt it continually borrows daily to fund itself. If it was actually paying the interest it would have to come from some expenditure cut in government and the US would be in recession/depression Territory … at least as measured by GDP. And, all this before the November election … the biggest auction of stolen goods in the history of mankind. Not looking good!
I am told our trading partners do not want our dollars thus we are seeing dedollarization . Sell those U.S. bonds and buy gold and that is just what they are doing. In the meantime gold is on a tear which means the dollar is getting clobbered. ( declining dollar} People need to determine which cave they want to live in and do it soon. God' blessings to all.
If I am correct, and please correct me if I am wrong, the US worker, not including government payroll, for all his toil, creates $27.3T in products and services (GDP). They pay $6.4T, or 23.44% of this reward for the privilege of their elected representatives to create for them $33T of debt ( and growing daily in interest and funding for wars and border security and civil protection, etc.), they think we need for a better lifestyle. So, where are the added benefits of this debt? Based on studies presented to us by our dear BB ( Bill Bonner, not Big Brother :-) ), This borrowed largess has not, in fact, reached the working prole. The working prole himself has borrowed an additional $17T to eke out his better lifestyle, as well as $4T in state and local taxes. It has, however, lined the pockets of the cabal, political elites, industrial elites, education elites, msm elites, foreign friends, and the list goes on. Do you think if the common prole knew about how this is destroying him, he would change his voting habits? I think it would. But, all possibility of that happening has been leeched out of our system. Welcome to 1984! Just to remind you, please watch the comedy Tuesday night. It will be a sublime comedy. Don't forget to vote!
Comedy, or farce Rich? Welcome to 1984 indeed - the parallels continue to astound me.
This is a great explanation to share. Thank you for making the post public.
What’s the BPR view on Doomberg’s very bearish outlook on oil/natural gas?
https://youtu.be/B4l6S4waXjY?feature=shared
I think we all need to go out and buy the shares of the companies that build printing presses, make paper, and bottle all that ink that we’re going to need🤪
Why is supply finite? It seems like China, India, etc. are willing to give us all the supply we want? Supply does not seem to be constrained, because foreign nations will produce whatever we want to buy in abundance. Does this limit inflation?
Depends on how you look at it. Actually, what it does is lessen the impact of inflation. The only thing that can limit inflation is to balance demand dollars more closely to supply output. If some supplier is willing to sell more cheaply to meet demand, then the effect of our imbalance is dampened. This is how we "avoided" inflation when China started flooding the country with its cheaper goods. Acquiring product more cheaply from China allowed us to have more of our output go to things causing the inflation, meaning not having to run such high deficits to finance vote-buying. Best always. PM