Meet the Real Boss

We are not borrowing from the future; we are stealing from it – spending money that we haven’t earned and never will earn. It’s a swindle, not honest finance. Borrowers will not repay.

Mugshot of Al Capone, Source: Getty Images

Monday, August 10th, 2026

Bill Bonner, from Poitou, France

‘You can go a long way with a smile. But you can go farther with a smile and a gun.’

—Al Capone

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The heat!

Here in France, this is the fifth heat wave of the summer. Temperatures are expected of over 100 degrees on Wednesday.

Meanwhile, of all the things Donald Trump may have done wrong, so far, the one that will do the most damage is the least controversial of all. In 2017, the US empire was already headed for bankruptcy. Trump just picked up the speed. But he did something else; he introduced a new style of governing. Most commentators rail against the style; few notice, or care, about the substance.

And as of August 2026, it probably doesn’t matter who is in the White House, or whether they are an East Coast slick...or a Kentucky hick; the ship is sinking.

Last week, we looked at how Donald Trump’s governing style was influenced by his mentor Roy Cohn, who had learned from ‘Fat Tony’ Salerno, and others. But how does that connect to the Primary Trend...or the decline of the empire?

Here’s the key to understanding the Primary Trend...and what is most likely to happen next. After the introduction of the 1971 fake dollar and low-rate regime, borrowing was easier than earning. And now, the US owes nearly $40 trillion. Half of that has been added since Donald Trump first moved into the White House. We have no reason to think that won’t continue. The total could be approaching $50 trillion in national debt when Trump leaves office.

Since July 1st, US debt increased by $450 billion. Over the last thirteen months, it has gone up by $3.6 trillion. Federal debt is increasing at $7 billion per day. At this rate, it should hit $40 trillion before the end of this year. By the end of the decade, it could be closing in on $60 trillion. And then...the sky’s the limit.

We are ‘borrowing’ from the future, say the sages. ‘We owe it to ourselves,’ they add. But we are not borrowing at all...since there is no chance of paying it back. And the people we are supposedly borrowing from have no say in the matter; some of them have yet to reach the cradle let alone the voting booth.

In order to pay off the debt, we would have to earn a $40 trillion surplus. But it’s not economically, politically or even mathematically possible. Have you seen any mention of it in the nation’s press? Any plans for it from the Treasury department? No? Why not? Because no serious person thinks it will ever happen. They will serve ice cream in Hell before the debt is repaid.

As for ‘owing it to ourselves,’ do you own Treasury bonds, dear reader? We don’t. Chief among lenders are foreigners, to whom we owe about $9 trillion. The Japanese are a special case. The Japanese government lent money at ‘ZIRP’ — zero interest rate policy. Japanese ‘investors’ borrowed from the Bank of Japan and then lent (buying bonds) to the Bank of the US (the US Treasury). And now, as Tom and Dan have been describing it, the US prints money not only to keep its own credit bubble pumped up, but Japan’s too.

Bessent et al are afraid that if Japan’s currency crashes, speculators will have to unwind all those T-bond trades...probably causing a crash in the US debt market.

At the current rate, for every dollar in tax receipts, the US spends about $1.33. Just getting to a balanced budget would require giving up nearly $2 trillion of spending annually...equal to 6% or 7% of GDP. Then, to repay the existing debt over a 15-year period would add another $2.6 trillion...bringing the annual total to 15% of GDP.

Recall that after the Franco-Prussian war, France was obliged to pay reparations equal to 25% of GDP, which were intended to cripple her economy. Paying off the US debt — even if begun next year — and adding in the 15-year cost of foregone deficits...would be a total burden of 225% of GDP. Not going to happen.

No, we are not borrowing from the future; we are stealing from it – spending money that we haven’t earned and never will earn. It’s a swindle, not honest finance. Borrowers will not repay. Creditors will not get the money they expect.

Lenders are already losing money...and have been for the last six years — the longest draw-down in the bond market in history.

Interest rates are at their highest level in 19 years...with the 30-year US Treasury at 5.27% yield. That’s up from less than 1% when the Primary Trend struck bottom in 2020. But it is set to go much higher. The last major yield cycle ended in 1981 after 44 years of rising rates. At its peak, the US 10-year Treasury yielded more than 15%. And that was when the feds still owed less than $1 trillion.

The empire is listing badly. But the rats are not abandoning the ship; they’re looting it. As the opinion piece in Les Echos put it...‘a society that cannot control its expenses...turns towards extraction,’...using the tactics perfected by leading political economists, such as ‘Fat Tony’ Salerno.

Poor ‘Fat Tony’ took the rap as head of the Genovese crime family. But his right-hand man, Vincent ‘The Fish’ Cafaro turned informant and caught him admitting to ‘Matty the Horse’ Ianniello that he wasn’t ‘the boss.’ That job was held by Philip ‘Benny Squint’ Lombardo. Too late. ‘Fat Tony’ went to jail and died there in 1992.

And there is where our dots connect. In the Empire, as in the mafia, the circus ringmaster is out in front. People love him or hate him. But he’s seldom the one really running the show.

Donald Trump gets the headlines...but the real ‘boss’ is deeper, darker, and more permanent -- the military, big Pharma, lobbyists, Wall Street, and the government itself. Elect whomever you want; the show goes on. And the deficits continue.

Regards,

Bill Bonner