In 1971, the US ran out of money and defaulted on its debts. Now, they didn’t say it that way. But by moving away from the gold standard, money as we understood it ended. I expected the stock market to plunge, but it went on to rise nearly 25%. That surprised me. But when I looked into it, I discovered the exact same thing happened in 1933 and it had the exact same effect. Here’s why. https://x.com/RayDalio/status/1922315906530869381
The U.S. is on track to default on its debt within four years. We need to refinance $9T this year, plus $2-3T in new deficits, but domestic savings are only $5T. Foreign creditors like Japan, who we’re alienating with tariffs, are dumping Treasuries—pushing 10-year yields to 4.5%. Higher yields (7-8%) would tank equities and the economy. Printing money just balloons the $70T Social Security liability with automatic cost-of-living hikes. Entitlement reform is the only fix, but it’s politically dead. We’re cornered. https://x.com/porterstansb/status/1922328215848157520
