Queen’s fabulous song “Crazy Little Thing Called Love” topped the billboards… Dallas and The Dukes of Hazzard took the top Nielsen television spots… Jimmy Carter was about to get booted out of the White House…
…and the federal funds rate hit 17.19%.
Once Fed Chairman Paul Volker beat inflation into submission, the United States enjoyed a low-interest-rate, free-money environment for the next four decades.
Rather than learn from our mistakes, a deficit spending nuclear reaction led to a borrowing explosion.
Unfortunately, most folks don’t realize HOW BAD things really are.
Heck, some politicians, who will not be named, think we can borrow into perpetuity. It’s like basic math just doesn’t apply to them.
They write off anyone who disagrees as a kook not grounded in reality. Any attempts to prepare for anything else get you slapped with a “disinformation” label and banned on social media.
Worse, financial advisors are buying this hook, line and sinker.
Financial media parrots these bozos, convincing the masses to buy equities unconcerned with the REAL DANGERS right in front of their faces.
These are the same people that called inflation “transitory” and expect the Fed to cut interest rates by 2024…
…And they’re all DEAD WRONG.
Anyone who isn’t preparing for interest rates to go up +300% is in danger of watching their wealth disappear faster than Hillary Clinton’s email server.
Now you might be asking… How did they come up with 15%? That seems rather arbitrary.
Unlike Alvin Bragg’s latest case, we like to use a little thing called EVIDENCE to back up our claims.
By law, the government has to publish its budget for public consumption.
This includes everything from the expected revenue sources to the underlying gross domestic product (GDP) assumptions.
What we’re focused on is the line item for interest payments.
The following is the Congressional Budget Office’s budget projections by category which include actuals for 2022 and forecasts through 2033.
We added the highlighted line that calculates net interest payments as a percentage of revenue.
In 2022, interest payments cost the U.S. government less than 10% of its revenues.
That’s expected to jump to 13.3% this year.
Can you imagine having the interest rate on a loan increase by 37% from one year to the next?
Any normal individual would tighten their belts, cut their spending and do whatever they can to avoid spiraling into bankruptcy.
We actually plan to let mandatory spending increase by 48% over the next decade and discretionary spending by 43%.
Here’s some perspective on how bad that is:
- In 2022, interest payments accounted for 7.6% of our expenses. By 2033, they’ll be 14.4%.
- We could balance the budget this year by cutting mandatory and discretionary spending by 25%. By 2033, we’d need to cut it by one-third.
- Or conversely, we’d have to raise taxes by that amount to balance the budget.
- You could eliminate all of Social Security right now and still not balance the budget.
Now, here’s a fun question… guess which two countries own 25% of all America’s debt held by foreign countries?
Japan and China.
Yep, China owns close to $1 trillion of our debt.
The good news is that that figure is down in percentage terms, as they used to own 50% of all our debt held by foreign countries.
So, let’s summarize the main point here:
- The government interest expense will grow exponentially in the next decade to account for 20% of our revenues.
- We’d need to either cut spending or raise taxes by 25% now to balance the budget or 33% in a decade.
- We could eliminate social security and still not balance the budget.
- China, who we aren’t on the best terms with, owns a ton of our debt.
None of this should come as a shock to anyone. This is all publicly available information that Congress literally has at its fingertips.
Yet… there seems to be a complete lack of urgency across the political spectrum.
Even better, some folks think we need to increase spending because why not… it’s only money, right?
Now, we aren’t about to just drop this heavy load on you and call it a night. That would make us as negligent as the very people we rail against.
Which is why we return to that key concept called evidence.
Data don’t care about your feelings or your beliefs. They don’t care that our country faces hard choices.
But if you make it your friend, it can be an incredibly powerful ally.
And there’s nobody better at that than Mark Skousen.
Mark, a prominent economist and seasoned history scholar, has dedicated the past several decades to teaching everyday folks how to achieve financial stability while minimizing risk.
However, it’s his latest work that’s captivated our attention.
Leveraging his deep expertise, Mark draws parallels between today and our past, pointing to the inevitable outcomes.
But it’s the profitable investment strategies based on hard evidence that make this video a MUST-WATCH for anyone seeking to secure and expand their wealth.
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