Dr. Mark Skidmore of Lighthouse Economics has just published an analysis that shows—even in the case of interest rates not rising—that the United States will need 50% of the country’s revenues to pay the interest on outstanding debt. If interest rates rise by just another point, it will be 55% of revenue needed to cover debt interest. The debt spiral is on.
Over the last two weeks, the U.S. dollar has fallen dramatically. To see movement on this scale in the U.S. Dollar Index is nothing short of shocking—it’s called “elevator down”! Any thoughtful investor must do serious due diligence.
Catherine is receiving many questions related to the credit issues of U.S. Treasury securities. Therefore, our Blast from the Past for this week is “Caveat Emptor”—Let the buyer beware! Although this is a piece written years before the pandemic, for many, its poignancy and relevance are becoming apparent only now.
Together with “Caveat Emptor,” we also recommend you revisit the brilliant collection of seven briefing papers related to FASAB-56, titled “U.S. Federal Finances: The Law,” which maps out the landscape of monetary and fiscal laws in the United States. Investors or journalists who want to understand the material that Catherine and the Solari team put together at the Missing Money website are a step ahead with this collection of legal briefings that summarize what otherwise would take years to find and understand. Thanks to these papers, journalists like Matt Taibbi were able to write about the $21 trillion and put the missing money on the map.
This is seminal Solari work. And many are finally beginning to grasp its importance.
Also be sure to read Dr. Mark Skidmore’s recent piece: How Long Can the Federal Reserve Continue to Push Interest Rates Up Before the Federal Government Goes Bust?
Related Solari Reports: