The US government is in a lot of debt. All of its debt is owed to the Federal Reserve Bank, a bank that is not owned and controlled by the government, but by a group of private shareholders. It is a private corporation that “issues” money to the government, which it has the government print and then distribute as notes of debt to them on which the government has to pay interest.
It is the greatest Ponzi scheme in history, because it is mathematically impossible to pay the debt because the Federal Reserve is the one who issues the currency. It does not matter how much “money” the government “earns,” because EVERY DOLLAR is not a holding of value, but a note of issued debt to be repaid. Even if the US government were to have all of the money in the world, the debt still could not be paid because all of the assets it holds would be notes of debt, and the Federal Reserve Bank would be charging interest on it.
This is one of the reasons why usury is a sin that is considered by the Catholic Church as well as many other cultures and religions a crime that is “worthy of death” and which “cries out to Heaven for vengeance,” because it is the institutionalization of oppression on the common man by an elite few and through which the working man is deprived of his justly earned wages, which then leads to the willful murder of the innocent. It is so evil that it manages to embrace three of the most depraved sins of mankind in one act.
All usurious forms of finance have two parts- a principal, and an interest rate. The interest is amortized over a period of time, followed by the principal. This usually is not a problem for most people, for so long as they can pay both eventually, the system will function. It becomes a serious problem when only the interest can be paid and the principle can never be amortized, as this leads to a fiscal default and bankrupcy. If this happens to a society, it means a collapse of the currency and conflict, if not immediately, then in the comparatively near future.
A recent report from the US Treasury has indicated that as of 2024, all US debt payments will be used to cover just the interest on her debt:
While it is common knowledge that the US budget deficit is soaring even though the US economy is allegedly growing at a brisk, mid-2% pace, resulting in recurring bond trader nightmares about funding the growing twin US deficits (Budget and Current Account), what few people know is the increasingly ominous composition of this budget deficit.
As we first pointed out one month ago, when looking at the US ‘income statement’, most concerning by far is that for the first four months of fiscal year 2019, interest payments on the U.S. national debt hit $221 billion, 9% more than in the same five-month period last year, with the rate of increase breathtaking (see chart below). As a reminder, according to the Treasury’s conservative budget estimates, interest on the U.S. public debt is on track to reach a record $591 billion this fiscal year, more than the entire budget deficit in FY 2014 ($483 BN) or FY 2015 ($439 BN), and equates to almost 3% of estimated GDP, the highest percentage since 2011.
It only gets worse from there.
As part of today’s Treasury Presentation to the Treasury Borrowing Advisory Committee, there is a chart showing the Office Of Debt Management’s forecast for annual US debt issuance, broken down between its three component uses of funds: Primary Deficit, Net Interest Expense, and “Other.”
That chart is troubling because while in 2019 and 2020 surging US interest expense is roughly matched by the other deficit components in the US budget, these gradually taper off by 2024, and in fact in 2025 become a source of budget surplus (we won’t be holding our breath). But what is the real red flag is that starting in 2024, when the primary deficit drops to zero according to the latest projections, all US debt issuance will be used to fund the US net interest expense, which depending on the prevailing interest rate between now and then will be anywhere between $700 billion and $1.2 trillion or more.
In short: in the stylized cycle of the US “Minsky Moment”, the US will enter the penultimate, Ponzi Finance, phase – the one in which all the new debt issuance is used to fund only interest on the debt – some time around in 2024.
From that point on, every incremental increase in interest rates, which will eventually happen simply due to rising inflation expectations, will merely accelerate the ponzi process, whereby even more debt is sold just to fund the rising interest on the debt, requiring even more debt issuance, and so on, until finally the “Minsky Moment” arrives. At that point, while we don’t know yet what the next reserve currency – either fiat, hard or digital – after the US dollar will be, we urge readers to own a whole lot of it. (source, source)
I have been saying for this year that based on observable economic conditions, the common man must prepare now because conditions today are eerily similar to those of 2003 that lead up to the crash in 2008. The difference is that this is 2019 and five years from now is 2024.
The government said that the economy “recovered” back in 2009, but the truth is that the economy never has. Some would argue that there was a “depression” which took place and from which the US has recovered or is recovering. I do not share either of these theories in their totality.
A slight “depression” in the economy did take place, but there never was any true recovery from it because the “depression” was part of what appear to be a long-term stagnation of economic intercourse coupled with inflation either by price increases, stagnant or declining wages, stagnant or declining job opportunities, or all three.
Daniel Estulin, a Spanish journalist who has spent years investigating the Bilderberg Group, which is a group of very wealthy individuals in finance, industry, and government who meet annually to discuss world politics and shape economic and political policies, reported from the 2009 Bilderberg conference that:
Before the meeting began, Bilderberg investigative journalist Daniel Estulin reported on the main item of the agenda, which was leaked to him by his sources inside. Though such reports cannot be verified, his sources, along with those of veteran Bilderberg tracker, Jim Tucker, have proven to be shockingly accurate in the past. Apparently, the main topic of discussion at this year’s meeting was to address the economic crisis, in terms of undertaking, “Either a prolonged, agonizing depression that dooms the world to decades of stagnation, decline and poverty … or an intense-but-shorter depression that paves the way for a new sustainable economic world order, with less sovereignty but more efficiency.” (source, source)
It has been ten years since this was written, and it appears that the former of the two predictions has been closest to what is taking place.
The people who have felt the economic “hit” the hardest are the Millennials, and now it is beginning to affect Gen Z. In comparison to their Boomer and Gen X parents respectively, the Millennials and now Gen Z are finding themselves often times burdened early in lift with substantial debt and amid high housing prices, declining wages, declining job opportunities, and work instability, they find it difficult to pay bills, notwithstanding how to save and plan for the future. Male-female relations have also worsened due to policies that favor women and the legal enfranchisement of women that has come at the subsequent disenfranchisement of men. Fewer children are being born than ever because families are not forming since the social ties and now, social protocols that provided rules and a structure for them to meet and form healthy relationship is no longer existent. They have become perpetual renters, living in a state of suspended adolescence and are continually entertained to distract them from the misery that has become their life. What money those get to spend many times comes from their parents, who as they age are beginning to cut off their own children from financial resources and many of the Boomer generation are in debt and will likely not leave an inheritance to their children, as what they do have will go to service the debts of their creditors.
In order to “reset” the current economic situation, there will likely have to be a major catastrophe that annihilates the current financial system and allows it to start over, and in the process of doing this it would turn over countries and cause serious conflict.
It would be the perfect reason to have a war.
Shoebat.com has emphasized that based on the current set of evidence, which is subject to change, there is a real possibility of a major global war towards the end of the 2020s.
If there were to be another economic recession, which it surely will come, then it will undo and worsen the little “recovery” work that has been done to the economy. Many have noted that the current economic situation is already worse than the years of the Great Depression, and other economists are saying that the next economic crash definitely will be worse.
Be ready, because economic instability leads to political instability, and if serious troubles befall the US government’s financial system, which it appears they will, it is a sign that war is very close.