The Behavior of Analog Animals

Tuesday, July 14th, 2026

Bill Bonner, from Youghal, Ireland

---

“Another scorcher!”

A neighbor drove up yesterday with an alarming report.

“And this heat wave is not going to let up. It’s supposed to go on for all of next week.”

We’ve become accustomed to life in Ireland. It rains most of the year. But for just a few weeks in the summertime, the sun shines...and the heat rises.

“There’s nothing like an Irish summer,” he explained. “The weather can be gorgeous. But sometimes it gets so hot you can barely work.”

Down at the beach, near Ardmore, there is rarely anyone there at all. You drive down a one-lane road, with weeds and wildflowers bursting out from both sides. At its end, is a parking area for two or three cars along with a sign telling you to watch for rip tides…don’t litter, etc. There is even a box of children’s toys, to be used and returned.

But this past weekend, people tried to escape the heat by jumping in the water. Traffic was so heavy you’d think Jesus Himself was doing full immersion baptism in the surf.

Our grandson from Florida:

“The water was freezing cold. No one would swim in water like that at home. But it was great...very invigorating.”

Over on the continent, the heat was not invigorating, but deathly. Japan Times:

European countries reported more than 10,000 excess deaths during the record-breaking heat wave that engulfed the west of the continent in late June, official data showed. The vast majority of deaths — more than 9,000 — were among people ages 65 and above, according to data published by EuroMOMO, a network backed by the European Centre for Disease Prevention and Control and the World Health Organization.

The worst of the heat has passed. But temperatures are still in the ‘90s in Paris.

Back in Ireland, we were getting into the local ‘heat wave’ mentality. We humans are analog animals, not digital. There is ‘hot weather’ on the Finnish coast as well as in the Amazon jungle, but they are not the same. And every village may have its idiot. But the idiot from Chevy Chase may be very different from the one from West Baltimore.

The idiots from Chevy Chase, an upscale Washington, DC suburb, like numbers, some more than others. They look at them and search for someone to blame. Is the temperature a degree higher than it used to be? Do White people earn more than Black people? Do men earn more than women? When the numbers don’t measure up, the improvers look for solutions.

Many of them think the world is heating up...because we humans use too much fossil fuel. Al Jazeera:

Scientists attribute the unprecedented temperatures to human-caused climate change, which has warmed the planet by about 1.4°C above pre-industrial levels, making extreme heat events more frequent and intense. Research indicates that a heatwave of this magnitude would have been virtually impossible 50 years ago, and similar events in the past, such as in 1976 or 2003, would have been significantly cooler.

Who’s responsible? The New York Post:

A Paris politician blamed Americans and US air conditioning for the record-breaking heat wave in Europe that has resulted in more than 1,300 excess deaths.

After US tourists mocked France over the lack of air conditioning across the country amid 104-degree temperatures, Audrey Pulvar, deputy mayor of Paris for international relations, claimed the situation was partly America’s fault.

Yesterday was too nice a day to worry about it. Instead, our neighbor graciously offered to take us on a road-trip up to visit an agricultural college. The aforementioned grandson is thinking of becoming a farmer. The outing might help him decide, we reasoned.

The drive — more than five hours in all — was stunning...along peaceful rivers, up over the Knockmealdown mountains, through the meadows and farmland of Tipperary. The views were exceptional.

“You should’ve seen this a couple weeks ago,” our driver told us we went through the mountain pass. “These rhododendron bushes – they’re an invasive species, you know – were in full bloom. It was gorgeous.”

“But wait,” we said to our host as we neared the end of the expedition. “Where are all the poor people?”

“We’ve covered a lot of ground...through little towns...up and down hills...through one-lane roadways. Wages in Ireland are only about $5,000 per month. In the US, they’re over $6,000. So, a lot of people must earn a lot less. How come we haven’t seen any poor people? No junked cars. No rusty refrigerators. No tumble-down houses or derelict yards. No trash on the sides of the road. No unkempt houses...or even yards. What gives?”

“This is not Mississippi,” came the answer. “People in farming areas are generally prosperous. You might see some poverty in the cities, but rarely in the countryside. But it’s nothing like the US. Here in Ireland, people are taken care of. We don’t have a huge military budget. So, the government’s money is spent on social services. And most of us have confidence in the government to spend our money wisely.”

That explanation was reasonable, but not sufficient. We countered:

“In the US, the feds can spend all the money they want. People would still throw trash out the window and live in derelict houses.”

“Maybe it’s a cultural difference,” our neighbor pursued the question. “We’d be embarrassed to have a trashy lawn.”

It’s all ‘cultural,’ isn’t it? All relative. All specific to places, times, and people. The rhododendron bloomed last month, not this month. People here pick up trash; they’d be ashamed of a junky yard. And people all over Ireland are complaining about the heat while the temperature barely gets over 75 degrees.

Regards,

Bill Bonner

---

Source: Monthly Statement of the US Treasury

Research Note, by Dan Denning

It’s not a big surprise that spending continues to outpace ‘revenues’ in the US budget. Uncle Sam’s revenues actually rose by $143 billion over the last twelve months. But spending was up by $172 billion. The year-to-date deficit is $1.36 trillion. And as always, the deficit devil is in the net interest details.

Rising interest expense on the $39 trillion in US debt is the biggest driver of bigger deficits. Gross interest expense year-to-date is over $1 trillion (gross interest includes interest paid on government debt held by the Social Security Trust fund and other government programs). That expense is $131 billion larger than this time last year. Why?

The Treasury is having to refinance maturing debt at higher interest rates. And there’s more of that debt. Those two factors alone would account for the rising cost of servicing our out of control debt. When the yield on the US 10-year note approaches 5%, the market starts ringing alarm bells (the current yield on the 10-year is 4.56%). But there’s a final twist in the tale.

Because Social Security is running a cash deficit—and likely will to the end of recorded time—it must redeem the special bonds held in the Trust fund to pay benefits. It does so by selling those bonds to the Treasury, who sends cash back to the Trust Fund to pass on to recipients.

Only the Treasury doesn’t always have the cash. In order to raise it, it must sell new bonds to the general public, generally at much higher interest rates than the bonds held by the Trust Fund. The weighted average interest rate on all US debt outstanding was 1.6% in 2021. That allowed the US to run high deficits without paying a big interest price.

But the Primary Trend in interest rates had already turned ‘up’ by then. According to the Treasury, the current weighted average interest rate on US debt is 3.41%. And the historical average is over 5%. The bottom line?

Every increase in interest rates adds billions in interest expense, which in June was the second-largest expense for the government. How can the Fed possibly raise rates in this situation? More on what this means for the dollar and gold later this week in our research notes to paying subscribers.