Debt Distress, Metal Mayhem

The two things that typically feature in an empire’s last chapters are excess spending...and unnecessary war. Both are self-inflicted wounds that fester…and eventually kill the host.

Stonehenge, Source: Getty Images

Tuesday, December 23rd, 2025

Bill Bonner, from Baltimore, Maryland

The solstice came and went. The sun...at its lowest point midday, on the horizon, on Saturday...now has begun its long climb. And now people north of the equator can say ‘hallelujah.’ The world is not coming to an end after all. The sun is not going to disappear. Life goes on.

We try to fit today’s events into the patterns of the past. After all, they are the only ones we have to work with.

Alert readers will see the problem immediately. As Heraclitus put it, ‘we only step into that river once.’ Which is to say, the water rushing by today is not the same water that flooded by yesterday...or last year...or 100 years ago.

Still...just as the sun bounces off the horizon at the soltstice each year, some patterns don’t change.

One of the surest patterns of the past is the birth-life-death program. Never fails. Happens to us all. To great empires too. Every one of them. All the greatest empires of the past are…well…past. Our empire will die too. It’s just a matter of time.

When Donald J. Trump was elected for the second time our intuition told us that his purpose was not to MAGA (make America great again). That’s a river you can’t step into twice. Instead, he was destined to help it get where it was going — down.

But when Nobel Prize-winning economists pick up the scent...we have to wonder: are we chasing the wrong stag?

Joseph Stiglitz at the South China Morning Post:

How Trump is hastening the end of American hegemony

Stiglitz is wrong about most things. Is he (and we) wrong about this too? Let’s look.

The two things that typically feature in an empire’s last chapters are excess spending...and unnecessary war. Both are self-inflicted wounds that fester…and eventually kill the host. In the 21st century, America has had plenty of both. When Mr. Trump was running for president in 2015, he promised to put an end to them.

Once in office, however, he played the role history had prepared for him. Full of bile, bombast and buncombe, he was a much more interesting president than his predecessor. But the Establishment breathed easy; he changed nothing important.

But even we were shocked by the new energy and determination that Mr. Trump brought to the job on his second go-round.

This time, not only did he boost the Pentagon budget, he gave it a credit card with a $1 trillion limit. He renamed it the Department of War to make it clear where we’re going. And now everyone is gunning up. Solidarity.com:

NATO: Prepare for war with Russia in 5 Years

The South China Morning Post:

Japan PM office source hints at need for nuclear weapons amid policy review

More ominously, Mr. Trump is bringing the muscle to the homeland itself. His masked-covered enforcers are sure to trigger a ‘domestic terror’ event they’re looking for.

As to spending, there too, POTUS has stayed the course. Rather than retreat from unaffordable, excess spending, he has added even more unaffordable and more excessive spending — with a Big Beautiful Budget Abomination that guarantees more debt and distress in the years ahead.

Much was made of the young gunslingers on the DOGE posse. They were said to be putting an end to billions in waste. But after riding into town, guns blazing, they seem to have mounted up and left just as quickly; nothing more is heard of them.

Meanwhile, as Stiglitz points out, Trump has also made great strides towards isolating the US, along with its sidekick, Israel, and turning much of the world against us. Capricious tariffs, mass murder, destruction, sanctions and seizures have driven friends away. Washington Monthly:

Donald Trump’s go-it-alone America

Trump’s uniquely toxic brand of “self-reliance” threatens the collective strength that truly makes America great.

Also worth mentioning is the remarkable crime wave emanating from the White House. POTUS announces a flip-flop on tariff policy; lo and behold, someone has put on a very profitable trade just hours before...as if he knew something was coming. Ambassadorships are up for sale. Presidential pardons too. And the President’s crypto scheme is the slickest grift ever to blight American politics..

In a remarkably short time, too, some of the least qualified people in the country have been put into positions of power. Any day we expect Trump’s golf caddie to be named Secretary of the Interior.

Mr. Stiglitz, no doubt, regards all these things as a failure; we see them as a success.

Life goes on. We begin a new solar cycle. And Mr. Trump’s historic role remains the same -- not to save the empire, but to destroy it.

He’s doing a good job at it.

Regards,

Bill Bonner

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Research Note, by Dan Denning

Gold traded above $4,500/ounce overnight. Silver above $70/ounce. Both new all-time highs. Both are enjoying their best year since 1979. What next?

One theory is that paper markets (Comex and LBMA) have lost control of the price. Central bank buying and buyers from the East—who apparently can’t get enough of the shiny stuff—are now in control. Having turned their back on the US dollar (at least at the margin) there is a lot of unfulfilled buying.

It’s also the end of the year. Which means a lot of institutional investors may be doing some ‘window dressing’ and adding precious metals to their portfolio to show they own them (bad form to not own some of the best-performing assets of the year). The gold/silver ratio (see above) suggests something big has happened/is happening.