Category: US Debt
The analysis published under this category are as follows.
Wednesday, February 24, 2021
US Debt and Yield Curve (Spread between 2 year and 10 year US bonds) / Interest-Rates / US Debt
By: Nadeem_Walayat
One of the reasons why my analysis of April 2019 was more subdued in terms of the prospects for US house prices than it would otherwise have been is because the yield curve was flirting with inversion, that I concluded that the Fed would not allow to take place and thus adopt whatever measures were necessary to PREVENT inversion that tends to foreshadow lower inflation and recessions.
The Fed succeeded in preventing a sustained inversion during 2019, with the yield curve massaged to hover around 0.2% that is until the pandemic broke and the Fed panicked and opened the monetary flood gates sending the yield curve soaring to currently stand at 1% as the bond market is discounting higher future inflation as the consequence of rampant money printing.
Read full article... Read full article...
Monday, December 21, 2020
Overstretch: The Long Shadow of Soaring US Debt / Interest-Rates / US Debt
By: Dan_Steinbock
If the past year was dominated by the huge human costs of COVID-19, the next few years will be about its economic aftermath, including the alarming rise of US debt. What’s needed is multilateral cooperation - a new 'Grand Alliance.'
On Friday, Congressional leaders failed to secure a bipartisan deal on a $900 billion pandemic relief package. A government shutdown was avoided only with a 2-day extension.
A protracted shutdown would amplify the risks for pandemic escalation and economic crisis, amid the long-awaited vaccine rollout. Bipartisan tensions are compounded by the impending Georgia Senate runoff races in January that will determine control of the chamber in the Congress.
Read full article... Read full article...
Monday, December 07, 2020
What Do We Do with All This Debt? / Interest-Rates / US Debt
By: John_Mauldin
Before the coronavirus pandemic I expected the US would hit the debt wall in the late 2020s. Now, the debt is growing even faster and we will hit that wall a lot sooner.
What happens when we come to the place where we have to deal with all that debt?
Fortunately, my favorite central banker, Bill White -- who was the Bank for International Settlements' chief economist -- did a brilliant interview with my friend Mark Dittli in Switzerland in November that gives us some answers.
Read full article... Read full article...
Wednesday, October 14, 2020
US Debt Is Going Up but Leaving GDP Behind / Interest-Rates / US Debt
By: John_Mauldin
We have plenty of evidence that US debt will balloon to $50 trillion by 2030, maybe more. Many smart people conclude that, in the meantime, the federal debt isn’t a problem.
Looking at the numbers as a percent of GDP—and considering the CBO long-term forecasts out to 2050—Sam Rines, whom I greatly respect, writes this:
"In its latest round of projections, by far the most intriguing portion of the analysis related to the dynamics around the US federal debt load. The US debt load has increased dramatically due to the response to COVID, but the ability to service the US debt load is actually improving.
Thursday, October 08, 2020
5 Consequences of US Debt at $50 Trillion / Interest-Rates / US Debt
By: John_Mauldin
With the US set to breach the $50 trillion mark in debt by 2030, here are five things we should start thinking about sooner rather than later.
1. Raising taxes will not solve the problem. Of course, it could help reduce the deficit some, but it would be more of a token. That is just the reality. From the Tax Foundation, here are the real numbers as of 2017.
Read full article... Read full article...
Monday, October 05, 2020
To US $50 Trillion Debt (and Beyond) / Interest-Rates / US Debt
By: John_Mauldin
In my 2020 forecast letters, published in January as the pandemic was just gaining attention, I noted this:
"When we do have a recession, which again I point out is likely to be after the election (the only meaningful data point between now and the end of next year), the deficit will explode to over $2 trillion per year and, without meaningful reform, never look back. That puts US debt at $35 trillion+ by the end of 2029."
According to CBO, this deficit -- which I said optimistically, in hindsight, would be over $2 trillion in a recession year -- will be more like $3.3 trillion.
What does this do to the national debt? First, we have to define some terms.
Read full article... Read full article...
Sunday, April 05, 2020
US Federal Budget Deficits: To $30 Trillion and Beyond / Interest-Rates / US Debt
By: John_Mauldin
In my decade forecast, I projected that in the next recession that the deficit would climb to over $2 trillion. Clearly, that demonstrates I am an optimist. Here’s a chart I shared back in January.
Between reduced tax revenues and increased spending, I now expect this year’s deficit will be at least $4 trillion.
Read full article... Read full article...
Wednesday, March 25, 2020
US National Debt is About to Surge Like Never Before! / Politics / US Debt
By: Michael_Pento
The U.S. National Debt is about to surge like never before, along with the rest of the entire planet’s gigantic pile of sovereign IOUs. America started with a $23.5 trillion debt before the Wuhan virus outbreak, with annual deficits running over a $1 trillion; and projected to be at least that amount for the next dozen years. But then, the stock market and economy crashed due to the catalyst of the COVID-19 pandemic, which pricked the massive bubble in junk bonds and equities that I have been warning about for years.
Read full article... Read full article...
Thursday, February 27, 2020
Trump or Sanders? Both will pile up the Debt / Politics / US Debt
By: Richard_Mills
Whether it’s a Democrat or a Republican installed in the White House this November, you can count on fiscal discipline going out the window. Neither the incumbent, President Donald J. Trump, nor the leading Democratic contender to replace him, Bernie Sanders, appears to give a hoot about shoveling more onto the enormous pile of debt that a few months ago shot past $23 trillion.
Why does this matter? Because debt impedes economic growth . And just like a business, if a country isn’t growing, it’s dying.
Keep that in mind as we explain how the real problem with the US economy, and what is driving gold prices ever higher, is not the coronavirus (though Covid-19 is certainly making things worse), but the 500-pound debt gorilla that is sitting on Uncle Sam’s chest, fattened by an all-you-can-eat buffet of dollar-denominated debt.
Read full article... Read full article...
Tuesday, January 21, 2020
Former Fed Official Says Government Can Borrow a LOT More / Interest-Rates / US Debt
By: MoneyMetals
Narayana Kocherlakota, the former President of the Federal Reserve bank of Minneapolis wants you to know the Federal Government can never borrow too much money.
Our government already borrowed $23 trillion and deficits are expected to exceed $1 trillion per year. He knows many Americans feel anxious about the federal government going bankrupt, and he has a simple solution.
Wednesday, December 04, 2019
Elephant in the Room: Why Nobody Talks About Ballooning Federal Deficits / Interest-Rates / US Debt
By: MoneyMetals
The presidential race will mesmerize Americans over the next 11 months. The country hasn’t been this polarized since the Civil War.
Voters on the left desperately want a story which undermines support for President Trump. They are also searching for a candidate who can actually win.
Many Republicans are outraged about the Deep State and corporate media campaign obsession with unseating a duly elected president – and they worry an avowed socialist could win the Democratic primary and, just possibly, the general election.
Saturday, October 12, 2019
Social Security Is Screwing Millennials / Politics / US Debt
By: John_Mauldin
Social Security is a textbook illustration of how government programs go off the rails.It had a noble goal: to help elderly and disabled Americans, who can’t work, maintain a minimal, dignified living standard.
Back then, most people either died before reaching that point or didn’t live long after it. Social Security was never intended to do what we now expect, i.e., be the primary incom source for most Americans during a decade or more of retirement.
Life expectancy when Social Security began was around 56. The designers made 65 the full retirement age because it was well past normal life expectancy.
No one foresaw the various medical and technological advances that let more people reach that age and a great deal more, or the giant baby boom that would occur after World War II, or the sharp drop in birth rates in the 1960s, thanks to artificial birth control.
Read full article... Read full article...
Wednesday, October 09, 2019
The Later United States Empire / Interest-Rates / US Debt
By: Richard_Mills
In 1917, the United States created the federal debt limit (or ceiling) to make it easier to finance World War One, essentially allowing Congress to borrow money to pay for the war effort by issuing bonds.
By 1939 with World War Two looming, Congress passed the first aggregate debt limit, but it meant little. For nearly 60 more years the debt ceiling caused nary a ripple, until 2011 when Congress delayed approval of the annual budget, nearly causing a government shutdown. Then a minority in the House of Representatives, Republicans balked at the $1.3 trillion deficit, the third largest in history, so Democrats suggested a $1.7 billion cut in defense spending, since the war in Iraq was winding down. The GOP wouldn’t agree to that, instead offering $61 billion in non-defense cuts including Obamacare. Finally the two sides agreed on $81 billion worth of cuts.
Read full article... Read full article...
Friday, August 23, 2019
Modern Monetary Theory Could Destroy America / Economics / US Debt
By: John_Mauldin
I am back from my 14th annual Maine fishing camp.
The private event at Leen’s Lodge is generally called Camp Kotok in honor of David Kotok of Cumberland Advisors who started these outings many years ago.
CNBC and others began calling it the “Shadow Fed,” but it is really just a meeting of wickedly smart people focused on economics and markets. (I am allowed to attend for comic relief.)
We discussed the world’s problems and the general mood was that many of those problems are beginning to catch up.
Among other topics, there was an open “debate” about Modern Monetary Theory (MMT) and US fiscal strategy.
Tuesday, August 20, 2019
The Tip of the Debt-Bomb Iceberg / Interest-Rates / US Debt
By: Harry_Dent
This week I wanted to bring your attention to a key development. And while overlooked by many, is part of the trigger that will set off the next financial crisis.All eyes were focused intently this week on US Treasury yields. And a lot of people might have missed what I believe will prove to be a very big event – after the dust from the next big implosion finally settles.
Read full article... Read full article...
Monday, July 29, 2019
Trump Debt Deficits Then and Now : What a Difference 3 Years Make! / Politics / US Debt
By: MoneyMetals
As investors look ahead to a likely rate cut next week by the Federal Reserve, gold and silver markets have been consolidating their recent gains.
A big move in metals markets could come after the Fed’s policy meeting next Wednesday. Of course, the magnitude and direction of the move will depend on what Chairman Jerome Powell and company do and say.
Central bankers are under immense political pressure to lower interest rates and resume purchases of government bonds. A recent downturn in manufacturing and home sales data may well give them cover to roll out new stimulus even as the stock market sits near a record high.
Wednesday, July 17, 2019
Federal Debt Ceiling Reached as Federal Spending Rages / Interest-Rates / US Debt
By: MoneyMetals
The federal government will soon run up against its self-imposed borrowing cap once again.
Current estimates are for the government to max out its credit limit at a little over $22 trillion in early September. Congress goes on recess in August, so there is some pressure to address the cap right now.
Treasury Secretary Steve Mnuchin has been fulfilling what seems to be the most sacred responsibility of his position: borrowing money. It’s one that each of his predecessors has also undertaken, without fail and without regard to party affiliation, in recent decades.
Wednesday, May 22, 2019
Fed Encourages Runaway US Debt as “Minsky Moment” Approaches / Interest-Rates / US Debt
By: MoneyMetals
Federal Reserve officials like to pretend they can use interest rates like a motorcycle throttle on the U.S. economy. They can either rev things up by dropping interest rates or slow things down by moving rates higher.
The public has been led to believe the central planners can do whatever is needed with rates to keep things purring along.
The truth is the central planners at the Fed are meddling with forces beyond their control. They are encouraging consumers, companies, and government to take on debt. Soon, the nation will choke on it.
Tuesday, May 14, 2019
How US Debt Will Reach $40 Trillion by 2025 / Interest-Rates / US Debt
By: Harry_Dent
Smart people are worried about out deficit. They should be.Never mind the chaos around the world (like mass shootings, terrorist bombings, Armageddon marches, etc. ad infinitum), it was recently report that Christine Lagarde, the managing director of the IMF, is “doubly concerned” about the level of global debt. She was speaking at the Milken Institute Global Conference last week, where she explained why excessive debt is going to become a serious problem for developed and developing countries alike.
In case you’re wondering – I had to look it up – the Milken Institute is a research driven, non-partisan think tank that develops policy initiatives aimed at increasing economic growth to improve the standard of living for people across the globe.
I assure you. The levels of global and U.S. debt are way beyond concerning. They’re also way beyond being repayable.
Read full article... Read full article...
Monday, March 25, 2019
Real US National Debt Might Be $230 Trillion / Interest-Rates / US Debt
By: John_Mauldin
Trump has promised to free the US of debt. He pledged to pay all federal debt off in eight years.
But so far, it’s been just talk. Two years into Trump’s presidency, the US national debt has grown by $2 trillion.
The official, on-the-books federal debt is now at $22.1 trillion. $22.1 trillion is the face amount of all outstanding Treasury paper, including so-called “internal” debt.
It comes to about 105% of GDP, and that’s only the federal government.