The US Treasury Department is likely to try printing its way out of it eventually. When that happens–higher rates won’t reflect the risk of inflation from an overheating economy but of debt default.
You list some very good points and one knows "spending oneself out of debt" does not work. Clean-up is in order for the U.S.A. The history of the socialists (demos&somerep) spending every tax dollar they can get their hands on and borrowing large in addition has placed the U.S. taxpayer and investor in a tough position. One part of your review that must be questioned is the report by the CBO, thinking they can forecast ten years into the future is a non starter, they can not forecast (guess) two years ahead so for get ten years.
Essex cars were popular in Australia and were used to traverse the Outback with no roads. Like the T Model Ford they would go just about anywhere. I owned a 1926 Essex Coupe Hot Rod many years ago.
Hi Bill, firstly, if you click on the 3 dots next to your post there is an edit function so you can fix the post.
And no, it was a half built hot rod that I sold on. It was a few years later I finally finished a Hot Rod. Recently built 2 more a 1932 and a 1927, both Fords of course.
First let just put the figures right the high in de DXY was 1,1477 in sep 2022 . 3 % more than in the report .
Second , USA are running a deficit of 122 %
But Japan run a deficit twice bigger and the currency stay strong for decades .
Third , you and Tom have been on safety mode for one reason , you see both of you a huge crise coming ( me too ) that s the reason for talking the ratio. Dow / Gold to 5 .
The third point if happening will strengthen the usd dol more than the interest rates .
Don’t get me wrong I believe that at one point the usd will weaken … but what if the DXY reach my target of 1,30 first that’s an other 20 % that we can not ignore .
Now concerning the Paza Hotel accord sept 1985
They intervened at 250 yen per usd
2,90 deutchemark per usd and 2,50 Swiss franc per usd
But the down trend was « deja « in place , yen high was 260 , deutchark high was 3,47 per usd and Swiss franc 2,92
They just accelerated the down trend , so much that at one point they did the Louvre accord to stop the usd from falling … and even so the usd felt an other 20 %.
Just saying that you may be right on a weaker usd but could suffer an other 20 % before .
And yes a strong usd will hurt trillions if usd borrowed by the world since 1980 … and they may have to buy thoses usd and sell their national currcies to pay back the loans … strengthening the usd even more .
Thanks for your note note Juan. Re the debt figure the CBO figure I quoted is total debt held by the public, which excludes 'intra-governmental debt'. That's a difference of about $7.8 trillion, which is why the gross federal debt of 122% (which includes intra-governmental) debt is higher than the 117% figure CBO quotes.
For what it's worth, I agree that the gross figure is a more accurate figure of the total obligation. Even if the government 'owes the money to itself' it still has to pay it or default on it. In the past, a public debt-to-GDP level of over 130% (with annual deficits closer to 10% of GDP) has been the point of no return (much higher inflation, debt default, currency replacement).
We'll see about the dollar. Most other paper currencies look garbage by comparison. But come Monday, there won't be any more talking or speculating about what's going to happen. It will happen.
By the way, I would not call Japan's economy or financial system 'strong.' Their soaring public debt-to-GDP ratio has given them sluggish growth, bankruptcies, damaged public finances, and for investors...two lost decades of returns from almost all assets classes. Investors are so scarred that they are willing to buy government bonds, which enables Japan to finance its debt almost entirely out of domestic savings (not the case with the US).
Yes 22,9 % of the debt it’s hold by the foreigners
Of the 7,9 trillions 3,2 trillions by Japan , China , UK, caïman and Luxembourg .
The 77 % are in USA , and I think I red you once saying thank it may me a burden to pay this interest on the capital but 3/4 % or the interest of the 28 trillions goes back to the USA or stay in the USA not all bad .
I thoroughly enjoy your comments and analysis. Have you read David Rogers Webb, or heard his Documentary The Great Taking? Fascinating-to me- analysis as to why the velocity of money is/will dictate the "financialization" of the world economy. Basically says the "cake has been baked" by the bankers and world financial collapse of all securities is imminent. But no one has a crystal ball so we should continually be preparing for such. Thank you. George
Hi Petra, I've listened to his Documentary several times. Quite a reality check financially. Basically the message is get out of debt, build up your pantry, be able to grow some food, keep contact with family and friends, keep your health. He compares the current financial situation to the Great Depression because of its volatility and the time frame for recovery if and when it happens. Although it may already be occurring. Regardless, a fascinating analysis in my mind. Why isn't it being talked about? Very few recognize it, even fewer believe it. But the facts are clear: traditional securities are in the tank. Beneficial ownership versus real ownership is now the norm. But it is a legal construct and can be changed legally if enough people at the state level are willing to lobby for it. Several states and countries, ex. Monaco, are supposedly pursuing it. I forget the legal articles of the documents he quotes but he gives us something to sink our teeth into politically if we want to avoid complete subjugation to the PTB.
Dan, Ive been to Spain many times from Perth, WA. There is just too much to see. So it depends what you are after. Madrid has art and palaces, Barcelona has more art like Gaudi and Segrada familia, the cathedral he started designing and building in early 20th century and is almost complete. The bull fighting is over. Valencia close by the the coast has grand art on a city scape state. San Sebastian up north is a beach side cheaper tourist place and a foodie paradise with a fair few Michelin star restaurants. Close by is Guggenheim in Bilbao. Then there is historic Toledo and Segovia and Cordoba. The wines of Duoro and Rioja are excellent as is their Cava. Turn anywhere and you will enjoy. Hope you have an memorable time with your family.
For Spain, Granada is a must. This thread describes the water engineering feat they pulled off over 700 years ago. Amazing, and the area is beautiful .
Definitely Mr Dorow. When in Granada, the Alhambra is an absolute must to visit; the ingenuity of its water works are astounding to appreciate fully in person. Stay overnight.
Cheers,
Mark
Afterthought: get a copy of Washington Irving’s book "Tales of the Alhambra," and join him in his literary journey serving as U.S. Ambassador to Spain from 1842–1846.
Honestly I don't know or put much credence in all the economic details BUT what I do know is that the US debt is unbelievably huge and now that the woke Marxist incompetents have shot their wad it seems that the US economy / bond market / stock market etc. are in a pretty similar situation to the end of WWII i.e. something had to be done about debt i.e.sooner or later that will become obvious to even a blind politician with hearing loss and we have plenty of them. They had to rebuild the US economy from a war time economy, pretty much the same as now. So the chances of high grade corporate bond yields rising like from 1945 to 1980 look pretty damn similar. OR that's about 35 years of rising bond yields. One could bet the RINOs won't stop their spending instantly. So I'm with Dan i.e. there is no instant fix. Seems like times must be pretty similar to the end of WWII right now like we just defeated Hitler or something as evil but we are left with a 35 year problem, debt.
Your comments about Spain, and your father's uncles trip has inspired me. My wife and I plan on following that guide, with some exceptions this year, probably in the summer, and accompanied by my brother and law and his wife, who have spent the last twenty plus years living on and off in Barcelona. Thanks for sharing the book!!
Economic nationalism, rooted in mercantilism, undermines economic freedom and perpetuates corruption by prioritizing producer interests over consumer welfare, as evidenced by historical conflicts and policies in American economic history.
Economic Nationalism and Mercantilism
Economic nationalism, like mercantilism, is a system of statism that employs economic fallacies to build up a structure of imperial state power and special subsidies for favored groups, sacrificing consumer interests to producers.
The American Revolution was largely an economic revolt against British mercantilism, with complaints about the Navigation Acts, Stamp Act, and taxation without representation.
Alexander Hamilton’s plan to nationalize the Revolutionary War debt was a massive insider trading scheme, where insiders bought bonds at 2-10% of face value, knowing the government would later buy them back at 100% face value.
Protectionist Policies and Their Impact
Protectionist tariffs, a key component of Hamilton’s “American system“, led to the South Carolina nullification crisis in 1828, with an average tariff rate of 48%.
The Smoot-Hawley Tariff Act of 1930 sparked a trade war that shrunk global trade by two-thirds over three years, exacerbating the Great Depression.
Government Intervention and Corruption
Lincoln’s Pacific Railway Act of 1861 led to massive corruption, with politicians and contractors profiting from subsidies while taxpayers were left with debt.
The National Bank of the United States, modeled after the Bank of England, was intended as a political tool to subsidize favored corporations and create boom and bust cycles through cheap credit.
Historical Patterns and Modern Implications
The Republican Party had a monopoly on national politics from 1861 to 1913, with protectionist tariffs enacted during the Civil War lasting for 50 years.
In 2017, President Trump announced his economic nationalism agenda, citing Henry Clay’s American system and tariffs to protect American industry, aligning with the Hamiltonian British mercantilist system.
Alternative Approaches
The only unsubsidized transcontinental railroad was built by James J. Hill, who paid off Native American tribes directly and avoided government subsidies.
Franklin Roosevelt understood the disaster of the Smoot-Hawley Tariff and started the General Agreement on Tariffs and Trade (**GATT**) to reduce tariffs over the next 50 years.
Que the musical epilogue: the beginning of act 3 of Die Walküre, the 2nd of the 4 operas constituting Richard Wagner's Der Ring des Nibelungen. Wagner’s Ride of the Valkyries - https://youtu.be/GGU1P6lBW6Q?si=3GKqgoAxbT-Nng70
Cheers Soberingly,
Mark
[Shock is best generated when solid expectations suddenly go the other way. JM Oliver]
P.S. On August 9th, 1934, U.S. President Franklin D. Roosevelt implemented the seizure of all silver situated in the continental United States with Executive Order 6814 – requiring the Delivery of All Silver to the United States for coinage. This was the same abuse of executive power as Executive Order 6102, which FDR signed on April 5th, 1933, “forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates within the continental United States” with some differences.
▫️Understand Public Law 93-373 enacted on August 15, 1974
Chapter 1 of Title I of Public Law 93-373. Specifically, § 2 of this law states that “the prohibition against owning gold coins, gold bullion, and gold certificates is hereby repealed.”
An Act to provide for increased participation by the United States in the International Development Association and to permit United States citizens to purchase, hold, sell, or otherwise deal with gold in the United States or abroad.
▫️Public Law 95-147 (Gold Reserve Act Amendments of 1977) Congress enacted legislation that effectively limited the President’s authority to regulate gold, allowing such regulation only during a national emergency related to war.
The Little-Known Law that Reopened Gold Bullion in the U.S.
It’s easy to assume Americans have always had the right to own gold coins and bars. Although the United States used gold currency since its founding, actions taken by the federal government in the early 1930s essentially outlawed private ownership of gold on American soil.
Editorial Footnote: **GATT** General Agreement to Talk and Talk… ad infinitum
Dan, from the purple chart you provided, the peak of the chart shows 120% of GDP. However you claim that it already crossed the magical 130% line. your claim is not reflected in the chart.
Hi Ezio. I'll be more clear. The government is over-stating GDP and under-reporting debt-to-GDP by excluding intra-governmental debt.
The total debt-to-gdp ratio (gross debt), which includes intra-governmenntal debt, would be around 107% right now (gross debt at $36.1 trillion and GDP at $29 trillion according to BEA figures). Government borrowing reduces private sector borrowing (crowding out) and national savings and capital formation. This means CBO's projections for GDP are probably too high.
The gross debt-to-gdp ratio will go across the 130% level sooner than CBO projects, due to lower GDP growth and faster debt growth. The 130% threshold problem is sooner, not later.
Page 26 of the CBO report (first link below) shows gross debt reaching $59 trillion by 2035. In a previous publication (second link), CBO showed how the public debt to GDP ratio (which does NOT include intra-governmental debt) would exceed 200% of GDP in some scenarios, and 250% in other scenarios.
Projections ten or twenty years out in time are kind of goofy to make. But the conservative estimates are based on average growth in entitlement spending, above average GDP growth, and an average interest rate below where we think it will be. Thus, mostly conservative about this being a problem...later.
This is a problem now. The bond market knows it. The history books show it. That's the scenario we're preparing for.
Thanks for all you do. I have been a fan for a long time. Use to live in C. Springs, wife is from Loveland, so I am familiar with your area. I was in the USAF for a while and spent a cou;ple of weeks in Torejone AB outside of Madrid. A couple of my favorite places in Spain are Toledo, Segovia, and the Valley of the Fallen.
Toledo is where you can see how El Greco started; Segovia has a wonderful Roman Aq;uaduct, and Valley of the fallen is where Franco is buried. (really beautiful despite its purpose)
I highly recommend a tour of the Seville Cathedral. And if looking for a place to stay outside the city, I recommend La Morona Hotel in Moron De La Frontera, which is nearby. It's inexpensive, pleasant, and has great food. I used to stay there when I was visiting the US Air Force Base which is nearby.
I always enjoy your perspective! I also like Laramie, but haven't been in many years now. Perhaps next summer.
And, whilst in the Cadiz neighborhood; might as well go to take the walk across the runway into Gibraltar and be sure to get to the spot near Air Traffic Control for an epic selfie photo opportunity with the rock in the background. Then get up to Gibraltar’s summit to check on the wellbeing of the descendants of WWII’s smuggled Barbary Apes (Macaque) to see if the legend is still holding up okay.
You list some very good points and one knows "spending oneself out of debt" does not work. Clean-up is in order for the U.S.A. The history of the socialists (demos&somerep) spending every tax dollar they can get their hands on and borrowing large in addition has placed the U.S. taxpayer and investor in a tough position. One part of your review that must be questioned is the report by the CBO, thinking they can forecast ten years into the future is a non starter, they can not forecast (guess) two years ahead so for get ten years.
RALPH W.
https://en.m.wikipedia.org/wiki/Essex_(automobile)
Essex cars were popular in Australia and were used to traverse the Outback with no roads. Like the T Model Ford they would go just about anywhere. I owned a 1926 Essex Coupe Hot Rod many years ago.
I'm guessing and I'm hoping that that was not your favorite car.
First car!
Hi Bill, firstly, if you click on the 3 dots next to your post there is an edit function so you can fix the post.
And no, it was a half built hot rod that I sold on. It was a few years later I finally finished a Hot Rod. Recently built 2 more a 1932 and a 1927, both Fords of course.
Hi Dan thank you for your report .
First let just put the figures right the high in de DXY was 1,1477 in sep 2022 . 3 % more than in the report .
Second , USA are running a deficit of 122 %
But Japan run a deficit twice bigger and the currency stay strong for decades .
Third , you and Tom have been on safety mode for one reason , you see both of you a huge crise coming ( me too ) that s the reason for talking the ratio. Dow / Gold to 5 .
The third point if happening will strengthen the usd dol more than the interest rates .
Don’t get me wrong I believe that at one point the usd will weaken … but what if the DXY reach my target of 1,30 first that’s an other 20 % that we can not ignore .
Now concerning the Paza Hotel accord sept 1985
They intervened at 250 yen per usd
2,90 deutchemark per usd and 2,50 Swiss franc per usd
But the down trend was « deja « in place , yen high was 260 , deutchark high was 3,47 per usd and Swiss franc 2,92
They just accelerated the down trend , so much that at one point they did the Louvre accord to stop the usd from falling … and even so the usd felt an other 20 %.
Just saying that you may be right on a weaker usd but could suffer an other 20 % before .
And yes a strong usd will hurt trillions if usd borrowed by the world since 1980 … and they may have to buy thoses usd and sell their national currcies to pay back the loans … strengthening the usd even more .
We will see what happen in 2025 .
Thank again for you work Dan
Thanks for your note note Juan. Re the debt figure the CBO figure I quoted is total debt held by the public, which excludes 'intra-governmental debt'. That's a difference of about $7.8 trillion, which is why the gross federal debt of 122% (which includes intra-governmental) debt is higher than the 117% figure CBO quotes.
For what it's worth, I agree that the gross figure is a more accurate figure of the total obligation. Even if the government 'owes the money to itself' it still has to pay it or default on it. In the past, a public debt-to-GDP level of over 130% (with annual deficits closer to 10% of GDP) has been the point of no return (much higher inflation, debt default, currency replacement).
We'll see about the dollar. Most other paper currencies look garbage by comparison. But come Monday, there won't be any more talking or speculating about what's going to happen. It will happen.
By the way, I would not call Japan's economy or financial system 'strong.' Their soaring public debt-to-GDP ratio has given them sluggish growth, bankruptcies, damaged public finances, and for investors...two lost decades of returns from almost all assets classes. Investors are so scarred that they are willing to buy government bonds, which enables Japan to finance its debt almost entirely out of domestic savings (not the case with the US).
Thank you Dan for taking time to answer .
Yes 22,9 % of the debt it’s hold by the foreigners
Of the 7,9 trillions 3,2 trillions by Japan , China , UK, caïman and Luxembourg .
The 77 % are in USA , and I think I red you once saying thank it may me a burden to pay this interest on the capital but 3/4 % or the interest of the 28 trillions goes back to the USA or stay in the USA not all bad .
I thoroughly enjoy your comments and analysis. Have you read David Rogers Webb, or heard his Documentary The Great Taking? Fascinating-to me- analysis as to why the velocity of money is/will dictate the "financialization" of the world economy. Basically says the "cake has been baked" by the bankers and world financial collapse of all securities is imminent. But no one has a crystal ball so we should continually be preparing for such. Thank you. George
Thanks for mentioning Webb.
Strikes me that such a well researched and carefully crafted assessment doesn't find any recognition on such a platform.
Too many high quality sources and documents to ignore this imho.
Hi Petra, I've listened to his Documentary several times. Quite a reality check financially. Basically the message is get out of debt, build up your pantry, be able to grow some food, keep contact with family and friends, keep your health. He compares the current financial situation to the Great Depression because of its volatility and the time frame for recovery if and when it happens. Although it may already be occurring. Regardless, a fascinating analysis in my mind. Why isn't it being talked about? Very few recognize it, even fewer believe it. But the facts are clear: traditional securities are in the tank. Beneficial ownership versus real ownership is now the norm. But it is a legal construct and can be changed legally if enough people at the state level are willing to lobby for it. Several states and countries, ex. Monaco, are supposedly pursuing it. I forget the legal articles of the documents he quotes but he gives us something to sink our teeth into politically if we want to avoid complete subjugation to the PTB.
Dan, Ive been to Spain many times from Perth, WA. There is just too much to see. So it depends what you are after. Madrid has art and palaces, Barcelona has more art like Gaudi and Segrada familia, the cathedral he started designing and building in early 20th century and is almost complete. The bull fighting is over. Valencia close by the the coast has grand art on a city scape state. San Sebastian up north is a beach side cheaper tourist place and a foodie paradise with a fair few Michelin star restaurants. Close by is Guggenheim in Bilbao. Then there is historic Toledo and Segovia and Cordoba. The wines of Duoro and Rioja are excellent as is their Cava. Turn anywhere and you will enjoy. Hope you have an memorable time with your family.
For Spain, Granada is a must. This thread describes the water engineering feat they pulled off over 700 years ago. Amazing, and the area is beautiful .
https://threadreaderapp.com/thread/1879513926486139232.html
Definitely Mr Dorow. When in Granada, the Alhambra is an absolute must to visit; the ingenuity of its water works are astounding to appreciate fully in person. Stay overnight.
Cheers,
Mark
Afterthought: get a copy of Washington Irving’s book "Tales of the Alhambra," and join him in his literary journey serving as U.S. Ambassador to Spain from 1842–1846.
Honestly I don't know or put much credence in all the economic details BUT what I do know is that the US debt is unbelievably huge and now that the woke Marxist incompetents have shot their wad it seems that the US economy / bond market / stock market etc. are in a pretty similar situation to the end of WWII i.e. something had to be done about debt i.e.sooner or later that will become obvious to even a blind politician with hearing loss and we have plenty of them. They had to rebuild the US economy from a war time economy, pretty much the same as now. So the chances of high grade corporate bond yields rising like from 1945 to 1980 look pretty damn similar. OR that's about 35 years of rising bond yields. One could bet the RINOs won't stop their spending instantly. So I'm with Dan i.e. there is no instant fix. Seems like times must be pretty similar to the end of WWII right now like we just defeated Hitler or something as evil but we are left with a 35 year problem, debt.
Your comments about Spain, and your father's uncles trip has inspired me. My wife and I plan on following that guide, with some exceptions this year, probably in the summer, and accompanied by my brother and law and his wife, who have spent the last twenty plus years living on and off in Barcelona. Thanks for sharing the book!!
Hi Dan,
When you go to Spain, don’t miss the old city center in Cordoba and the cathedral and Alcazar in Seville.
The sights and food are unforgettable.
You need 1 full day in each city but recommend 2 days in each because you won’t want to leave.
Thanks for the reports.
LM
“It’s Always the Currency vs Investment”, posted 18 Jan. 2025 By Martin Armstrong, 5 min. read.
https://www.armstrongeconomics.com/qa/its-always-the-currency-vs-investment/?awt_a=1JPVU&awt_l=aIYA0n&awt_m=8ym0h4z_SeqvxrVU
Que the musical overture: Who’s (1971) anthem genius, 8 1/2 minutes of “Won’t Get Fooled Again” - https://youtu.be/_NzLs-xSss0 [remastered] …mental warmup for…
Thomas J. DiLorenzo: “The Curse of Economic Nationalism” (19 Jan. 2018) Mises Media video
https://youtu.be/todtJx2C0k0
Courtesy Summary
Economic nationalism, rooted in mercantilism, undermines economic freedom and perpetuates corruption by prioritizing producer interests over consumer welfare, as evidenced by historical conflicts and policies in American economic history.
Economic Nationalism and Mercantilism
Economic nationalism, like mercantilism, is a system of statism that employs economic fallacies to build up a structure of imperial state power and special subsidies for favored groups, sacrificing consumer interests to producers.
The American Revolution was largely an economic revolt against British mercantilism, with complaints about the Navigation Acts, Stamp Act, and taxation without representation.
Alexander Hamilton’s plan to nationalize the Revolutionary War debt was a massive insider trading scheme, where insiders bought bonds at 2-10% of face value, knowing the government would later buy them back at 100% face value.
Protectionist Policies and Their Impact
Protectionist tariffs, a key component of Hamilton’s “American system“, led to the South Carolina nullification crisis in 1828, with an average tariff rate of 48%.
The Smoot-Hawley Tariff Act of 1930 sparked a trade war that shrunk global trade by two-thirds over three years, exacerbating the Great Depression.
Government Intervention and Corruption
Lincoln’s Pacific Railway Act of 1861 led to massive corruption, with politicians and contractors profiting from subsidies while taxpayers were left with debt.
The National Bank of the United States, modeled after the Bank of England, was intended as a political tool to subsidize favored corporations and create boom and bust cycles through cheap credit.
Historical Patterns and Modern Implications
The Republican Party had a monopoly on national politics from 1861 to 1913, with protectionist tariffs enacted during the Civil War lasting for 50 years.
In 2017, President Trump announced his economic nationalism agenda, citing Henry Clay’s American system and tariffs to protect American industry, aligning with the Hamiltonian British mercantilist system.
Alternative Approaches
The only unsubsidized transcontinental railroad was built by James J. Hill, who paid off Native American tribes directly and avoided government subsidies.
Franklin Roosevelt understood the disaster of the Smoot-Hawley Tariff and started the General Agreement on Tariffs and Trade (**GATT**) to reduce tariffs over the next 50 years.
Que the musical epilogue: the beginning of act 3 of Die Walküre, the 2nd of the 4 operas constituting Richard Wagner's Der Ring des Nibelungen. Wagner’s Ride of the Valkyries - https://youtu.be/GGU1P6lBW6Q?si=3GKqgoAxbT-Nng70
Cheers Soberingly,
Mark
[Shock is best generated when solid expectations suddenly go the other way. JM Oliver]
P.S. On August 9th, 1934, U.S. President Franklin D. Roosevelt implemented the seizure of all silver situated in the continental United States with Executive Order 6814 – requiring the Delivery of All Silver to the United States for coinage. This was the same abuse of executive power as Executive Order 6102, which FDR signed on April 5th, 1933, “forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates within the continental United States” with some differences.
▫️Understand Public Law 93-373 enacted on August 15, 1974
Chapter 1 of Title I of Public Law 93-373. Specifically, § 2 of this law states that “the prohibition against owning gold coins, gold bullion, and gold certificates is hereby repealed.”
https://www.congress.gov/93/statute/STATUTE-88/STATUTE-88-Pg445-2.pdf
An Act to provide for increased participation by the United States in the International Development Association and to permit United States citizens to purchase, hold, sell, or otherwise deal with gold in the United States or abroad.
▫️Public Law 95-147 (Gold Reserve Act Amendments of 1977) Congress enacted legislation that effectively limited the President’s authority to regulate gold, allowing such regulation only during a national emergency related to war.
The Little-Known Law that Reopened Gold Bullion in the U.S.
It’s easy to assume Americans have always had the right to own gold coins and bars. Although the United States used gold currency since its founding, actions taken by the federal government in the early 1930s essentially outlawed private ownership of gold on American soil.
Editorial Footnote: **GATT** General Agreement to Talk and Talk… ad infinitum
Nice book, less than a decade from, “For Whom the Bell Tolls.” Those quiet people became murderers.
Something to be aware of in Spain: They’re apparently imposing a 100% property tax on non-EU citizens. I think they’re sick of British expats.
First car!
Dan, from the purple chart you provided, the peak of the chart shows 120% of GDP. However you claim that it already crossed the magical 130% line. your claim is not reflected in the chart.
Ezio Masciulli
Hi Ezio. I'll be more clear. The government is over-stating GDP and under-reporting debt-to-GDP by excluding intra-governmental debt.
The total debt-to-gdp ratio (gross debt), which includes intra-governmenntal debt, would be around 107% right now (gross debt at $36.1 trillion and GDP at $29 trillion according to BEA figures). Government borrowing reduces private sector borrowing (crowding out) and national savings and capital formation. This means CBO's projections for GDP are probably too high.
The gross debt-to-gdp ratio will go across the 130% level sooner than CBO projects, due to lower GDP growth and faster debt growth. The 130% threshold problem is sooner, not later.
Page 26 of the CBO report (first link below) shows gross debt reaching $59 trillion by 2035. In a previous publication (second link), CBO showed how the public debt to GDP ratio (which does NOT include intra-governmental debt) would exceed 200% of GDP in some scenarios, and 250% in other scenarios.
Projections ten or twenty years out in time are kind of goofy to make. But the conservative estimates are based on average growth in entitlement spending, above average GDP growth, and an average interest rate below where we think it will be. Thus, mostly conservative about this being a problem...later.
This is a problem now. The bond market knows it. The history books show it. That's the scenario we're preparing for.
https://www.cbo.gov/system/files/2025-01/60870-Outlook-2025.pdf
https://www.cbo.gov/publication/60319#_idTextAnchor012
Dan.
Thanks for all you do. I have been a fan for a long time. Use to live in C. Springs, wife is from Loveland, so I am familiar with your area. I was in the USAF for a while and spent a cou;ple of weeks in Torejone AB outside of Madrid. A couple of my favorite places in Spain are Toledo, Segovia, and the Valley of the Fallen.
Toledo is where you can see how El Greco started; Segovia has a wonderful Roman Aq;uaduct, and Valley of the fallen is where Franco is buried. (really beautiful despite its purpose)
All the best,
Luke C.
Green Valley, AZ (my bolt hole)
Hi Dan,
I highly recommend a tour of the Seville Cathedral. And if looking for a place to stay outside the city, I recommend La Morona Hotel in Moron De La Frontera, which is nearby. It's inexpensive, pleasant, and has great food. I used to stay there when I was visiting the US Air Force Base which is nearby.
I always enjoy your perspective! I also like Laramie, but haven't been in many years now. Perhaps next summer.
@Dan If you do Sevilla, combine it with Cadiz.
Retiring in Spain? As a US-Citizen? Well there are quite a number of downsides.
Definitely Petra.
And, whilst in the Cadiz neighborhood; might as well go to take the walk across the runway into Gibraltar and be sure to get to the spot near Air Traffic Control for an epic selfie photo opportunity with the rock in the background. Then get up to Gibraltar’s summit to check on the wellbeing of the descendants of WWII’s smuggled Barbary Apes (Macaque) to see if the legend is still holding up okay.
Cheers
M