“The debt goes up, the interest on the debt goes up and that raises the debt even further, and you just spiral out of control. We are there right now.”
• US Financial Death Spiral – John Rubino (USAW)
Analyst and financial writer John Rubino has a new warning about being fooled into thinking the economy is improving because inflation and interest rates have fallen some recently. Rubino says, “If the U.S. government is running crisis level deficits, which it is right now, borrowing money and paying interest on it means we are in a financial death spiral. The debt goes up, the interest on the debt goes up and that raises the debt even further, and you just spiral out of control. We are there right now. The official U.S. debt is $33.5 trillion. It’s growing by $1.7 trillion a year, and $1 trillion of that is interest costs. Interest costs are rising as the overall debt goes up. Then throw in this incredibly reckless military spending in the guise of foreign aid, and you get a society that has completely lost control.
That’s where we are now. We are in the blowoff stage of a 70-year credit super-cycle. Those things do not end with a whimper, and they certainly do not end with a soft landing. They end with a bang, and the bang is going to be centered on the currency. People are going to look at this and say, ‘Do I really want to hold the currency or bonds of a country that is destroying its finances at this trajectory and this scale?’ The answer will be ‘No.’ At that point, it is game over for a deeply indebted economy. We are headed that way fast, and these wars are taking us that way even faster.” If the Fed keeps raising interest rates, the economy tanks, but you protect the dollar. If you cut interest rates, you spike inflation even more, and the U.S. dollar tanks.
Rubino says in the end, we get a “massive reset,” and the everything bubble explodes. Rubino says the dollar is going to decline and, at some point, it starts to go into freefall in terms of buying power. Rubino explains, “If a currency starts to decline in a disorderly way, then you have a massive financial crisis on your hands. That is definitely where Japan is right now. The U.S. is headed that way fast. So, once we reach that point, there is no fix. Then it is only a matter of time that everybody realizes that there is no fix, and they just bail on the whole experiment, and that’s where we are headed.” Rubino talks about plunging home prices, more trouble coming in the commercial real estate market and why you need gold and silver as core assets during a currency reset.
“Literally everyone is talking about it, even amongst donors. But the response is always: ‘What are you going to do?’”
• Biden Donors, Advisers Struggling Over How to Address President’s Age (Sp.)
Advisers to Joe Biden are reportedly considering a number of strategies to address concerns about the American president’s advanced age.“The one number in the polling that was concerning… had to do with age, and that is one thing you can’t reverse no matter how effective Joe Biden is behind the scenes,” said Democratic adviser David Axelrod, referring to polling showing the majority of Americans believe Biden is too old to serve another term as president.“In front of the camera, what he’s projecting is causing people concerns, and that is worrisome,” said Axelrod. Biden’s advisers have reportedly acknowledged the president sometimes appears frail in public appearances. They’ve responded to the issue by considering minimizing the distances the president walks on camera and having him wear more comfortable shoes.
Advisers are also attempting to prevent the president from climbing stairs when possible. Biden generated attention early in his term when he was filmed stumbling while ascending the stairs to Air Force One; the octogenarian president has slipped while walking up the steps to the presidential plane as recently as September. Biden also attracted attention last year when he fell from his bicycle while exercising in his home state of Delaware, turning an attempt to demonstrate the president’s physical fitness into another gaffe. While Biden allies admit he occasionally appears physically weak, they insist he’s still mentally capable of fulfilling responsibilities. But the president has been widely known for being gaffe-prone throughout his career. Some worry his propensity towards verbal flubs is only exacerbating worries over this age.
Donors are advising Biden’s team to “lean in” on the issue, portraying the president’s age as a source of wisdom and encouraging them to portray him as an affable “Grandpa Joe” in contrast to his likely rival, former US President Donald Trump. “I think the strategy is not to even address it, to consider questions like that stupid or silly,” said one anonymous donor who took issue with the campaign’s strategy thus far. “Literally everyone is talking about it, even amongst donors. But the response is always: ‘What are you going to do?’” One political operative worried the campaign has become defensive over the issue, claiming, “They bristle in ways that aren’t helpful.”
