U.S. Debt Jumps Big Time
Massive Increase in Debt Signals Another Reason to Buy More Gold
This is serious. “Trillions are flying by so fast they’re hard to see!”
That the description of the skyrocketing national debt from Wolf Richter at WolfRichter.com. He is right. The US national debt just topped $36 trillion. It broke through $35 trillion just four months ago! It flew past $34 trillion like a bat out of the hot place only 11 months ago!
It’s not just serious. It’s deadly serious!
The astounding thing is, says Richter, “that the government has been racking up these huge debts despite the strongly growing economy. No one wants to even imagine how this debt would balloon if there’s ever a recession with falling tax receipts and surging outlays. It’s just nuts to have this during the good times.”
Let us repeat that last point. What happens in a recession? Government tax receipts fall. Social spending increases. Deficits explode.
Right now, the average interest rate on Uncle Sam’s $36 trillion debt portfolio is 3.30 percent. It is that low because much of the debt was issued when lower interest rates prevailed. But as those old debt instruments mature and are redeemed, they have to be replaced by new borrowings at now higher interest rates.
Bear in mind that as recently as 2001, the average interest rate on Uncle Sam’s debt portfolio was 6.5 percent. That is almost twice as high as today’s average rate!
Some people believe that the late-Everett Dirksen, a senator from Illinois from 1959 – 1969, remarked of escalating government spending, “A million here and a million there, and pretty soon you’re talking about real money!”
Others think he must have said, “A billion here and a billion there…”
But thanks to inflation, we have to employ “quotation inflation” as well. Today it would be, “a trillion here and a trillion there…”
A statement from the Committee for a Responsible Federal Budget makes an important point about human psychology: “It’s often said that the more times you say a word over and over, the more it starts to lose its meaning. With so many trillion-dollar debt milestones in recent years, it’s easy to forget that each of them has real-world consequences.”
As we have said many times, the debt has now grown so huge that it can only be paid by inflation – legal counterfeiting of ever more dollars that devalue every dollar already in existence.
And that is a certainty. The monetary superiority of gold, throughout the ages and around the world, is an unchallengeable certainty as well.
You will need it as debt continues to grow “out the wazoo!”