Economic Collapse Quickens

No one in Washington is in charge of this. In case you were wondering. All joking aside, there is a faction that is responsible as the economic collapse quickens.

As the official statement puts it, debt issuance by the Department of Treasury has reached epidemic proportions. The previous record had existed for 231 years, but the pandemic record was twice that.

According to the most recent data for the fourth quarter of 2023, the Treasury issued $7 trillion in new debt. It totaled $23 trillion for the year. We can thank Ukraine I reckon.

The result is a Treasury market that is $27 trillion, a 60% increase from when the pandemic began. So, there is new ink on one-third of the Treasuries. And it has increased by a factor of almost six since the financial crisis of 2008.

This means that the next crash could be even more severe.

Government expenditure in the United States is reaching levels not seen since World War II, and the national debt is increasing at a rate of $1 trillion every 90 days.

Why are we in such deep debt while, in theory, we are neither in a worldwide conflict nor a pandemic? “Buy growth” is the simple answer.

“The economy is not real,” Balaji Srinivasan explains. Debt is supporting it. Pretenses will lead to their eventual collapse.

Despite its love of debt, the Wall Street Journal has joined the chorus of voices warning that the dangers of excessive debt expansion are too real, especially considering the massive size and supposed security of the Treasury market, where any “instability” might have disastrous consequences.

For what reasons is it catastrophic? Why? Because all sorts of financial institutions, including 401(k) plans, pension funds, big businesses, and banks, handle US treasuries like cash. One definition of a treasury is interest-bearing cash.

True, but this is not the case: a Treasury is just the United States government’s word that it will repay you at some point, maybe in twenty or thirty years.

So, unlike cash, treasuries are vulnerable to market crashes caused by investors’ doubts about the government’s capacity or will to pay.

If that were to occur, hundreds of firms, the pension system, and all banking systems would go into default simultaneously.

It has the potential to disrupt the payment infrastructure of the entire financial system, rendering you unable to access funds.

If it seems bad, keep in mind that the very tenuous hope that Uncle Sam will repay all of the money plus interest is what keeps all of these afloat.

This is puzzling because neither the people who have a say in running the government (the voters) nor the lawmakers who do the actual running of the government (Congress) appear to believe that the debt is genuine.

You may give it a go right in your backyard by informing a voter that the cost of student debt bailouts will be one trillion dollars, equivalent to $10,000. Also, another battle will cost thirty thousand dollars. Many are indifferent.

Simply said, it is not genuine.

Thus, the electorate doubts its veracity. No one in Congress believes that is true. But the full repayment of the national debt, including interest, is precisely the illusion upon which everything rests.

Imagine everything that could go wrong.

There is a clear downward tendency in all budgetary trends. When a recession occurs, the already massive $2 trillion deficit will balloon by even more.

Spending on illegal immigration, Medicare, and new wars ensures that it will continue to churn as the economic collapse quickens.

The government’s coffers are about to empty at this time. “When?” is the one remaining question.