Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
UK Population Growth - Latest ONS Immigration Statistics and Consequences - 24th Mar 19
The Fed Follows Trump's Tweets, And Does The Right Thing - 24th Mar 19
Yield Curves, 2yr Yield, SPX Stocks and a Crack Up Boom? - 24th Mar 19
Risk/Reward in Silver Favors Buying Now, Not Waiting for Big Moves - 23rd Mar 19
Similarities Between Stock Market Today and Previous Bull Market Tops - 23rd Mar 19
Stock Market DOW Seasonal Trend Analysis - 23rd Mar 19
US Dollar Breakdown on Fed Was Much Worse Than It Looks - 23rd Mar 19
Gold Mid-Tier GDXJ Stocks Fundamentals - 23rd Mar 19
Which Currency Pairs Stand to Benefit from Prevailing Risk Aversion? - 23rd Mar 19
If You Get These 3 Things Right, You’ll Never Have to Worry About Money - 22nd Mar 19
March 2019 Cryptocurrency Technical Analysis - 22nd Mar 19
Turkey Tourist Fakes Market Bargains Haggling Top Tips - 22nd Mar 19
Next Recession: Finding A 48% Yield Amid The Ruins - 22nd Mar 19
Your Future Stock Returns Might Unpleasantly Surprise You - 22nd Mar 19
Fed Acknowledges “Recession Risks”. Run for the Hills! - 22nd Mar 19
Will Bridging Loans Grow in Demand and Usage in 2019? - 22nd Mar 19
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Burn the Flags, Can Trump Salvage The Sinking US Economic Ship?

Economics / US Economy Dec 01, 2016 - 01:54 PM GMT

By: Jeff_Berwick

Economics

When Nobel Peace Prize winner, Barack O’Bomber, was sworn into office on January 20, 2009, the national debt was $10.62 trillion.

The United States currently has a national debt total of over $19.9 Trillion according to the US national debt clock as of the writing of this blog. That’s an astonishing 87% increase in less than an 8 year period.


However, this past summer, during the US republican primary race, Dr. Ben Carson made a good point in mentioning that the $19 trillion dollar debt figure was actually quite misleading.

Most people never take into account that there is something called the Fiscal Gap, which at this point sits well over $210 trillion.  Given the current approximated population in the US of 315 million tax slaves, that is $666,666.66 per person!

This number includes all the unfunded liabilities owed by the government which are not put on the books such as the expenses of social security, medicare, medicaid, and departmental program funding etc vs the expected revenues from taxes. The two numbers should be equal or roughly balanced much like you balance your checkbook. When they are not in alignment it is referred to, politely, as a gap.

The only reason the United States is able to sustain such a massive gap and debt is because the dollar is a world reserve currency and as such, has the ability through the Federal reserve, to print infinite amounts of money.

In the past, we have seen how destructive the renunciation of a nation’s debt can be. For example, in the case of Brazil in 1982, when it announced that it was unable to make payments on its debt, the US Treasury responded by extending a direct loan of $1.23 billion to keep those checks going to the banks while a more permanent solution was negotiated through the IMF.

Of course, these restructurings never end up working which is evident because five years later, Brazil once again was forced to default on it’s then even larger $121 billion debt, a massive amount for the time, which rendered it so impossibly broke that it couldn’t even buy gasoline for its police cars. (Not a particularly bad thing in and of itself)

The result of a default or restructuring is always the same – the burden rests upon the shoulders of the taxpayers.

The same was true of Argentina in 1982 when they too could no longer service their debt. As always, their creditors immediately began negotiations for rollovers, guarantees, and new IMF loans which would inevitably plunge them even further into debt. By 1988, after the extension of new loans in the years prior, Argentina once again fell behind and stopped payments.

Getting back to the US, Trump is sending more mixed signals than a quarterback with Tourette’s.

On the one hand, Donald Trump has appeared to have expressed interest in returning to a precious metals standard through his meeting with the former CEO of the bank BB&T, John Allison, who stated  “the US should go back to a banking system backed by a market standard such as gold.”

On the other hand, it was just confirmed that ex-Goldman Sachs banker Steven Mnuchin, is Trump’s pick for Treasury Secretary. This is incredibly ironic considering Donald’s staunch criticism of Killary’s acceptance of money from the bank for speaking engagements.  This, along with many other potential appointments makes it seem as though Trump is just refilling the swamp, not draining it.

The truth is though, that this is all noise. Trump has no real viable plan for debt reduction, which is the biggest problem facing the nation. Even a return to a gold standard, which would be the best case scenario, would cause the biggest worldwide depression in world history as it would necessitate a reneging on the current debt which mostly underpins the world’s financial system.

In other words, something major must be broken if you want the debt to stop piling up. There must be a washing away of sorts.

That said, Trump brings a whole array of unknowns with him and there are sure to be plenty of shake-ups, which spell opportunities for speculators.  We’ll be analyzing many of them in the next issue of TDV to subscribers (see more info on subscribing here) set to go out later this evening.

We’ll soon find out exactly what Trump is up to… but in the meantime it appears he is already getting the hang of being a dick-tator:

Here was my polite, freedom friendly response to it:

Anarcho-Capitalist.  Libertarian.  Freedom fighter against mankind’s two biggest enemies, the State and the Central Banks.  Jeff Berwick is the founder of The Dollar Vigilante, CEO of TDV Media & Services and host of the popular video podcast, Anarchast.  Jeff is a prominent speaker at many of the world’s freedom, investment and gold conferences as well as regularly in the media.

© 2016 Copyright Jeff Berwick - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Jeff Berwick Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules