US Debt Hits $30 Trillion

US Debt Hits $30 Trillion
I remember when the national debt exceeded $20 trillion not all that long ago. At the time I read articles that stated we couldn’t go past $22 trillion and recover.
To put a trillion into perspective:
A million seconds is 11 and a half days.
A trillion seconds is 31,709 YEARS.
(By the way, do you see how we can't just tax the rich enough to pay off this debt?)
Now, we have exceeded that by 50% in a few short years. Covid is a convenient scapegoat as social spending ballooned by about $7 trillion in just 2 years. Spending became very addictive as we have seen
multi-trillion-dollar proposals in Washington. The politicians talk about a trillion or two or three as if they are spending no more than a nice dinner.
The Fed went from calmly asserting that inflation was “transitory” to almost outright panic with plans to raise rates 4 or 5 times this year alone.
Think about this if you need further proof of inflation growing, as of last December 80% of ALL dollars were printed in the previous 2 years!! Consumer inflation is now over 7% while producer prices have gone up 10%. This tells you where inflation is headed. Inflation is at 40-year highs and the administration insists on more unprecedented spending. The goal, in part, is to make many of the “Covid” emergency spending permanent. It’s the same thing they want to do to so-called voting rights.
The 10-year Treasury bond yield is currently 1.8%, up from 1.35%. However, with inflation running at 7.1% that is a negative yield of 5.3%. Buying bonds at current high interest rates locks in a loss of over 5%. That is a new 50-year record according to what I read. It is worse than the two spikes in 1974 and 1980, both of which corresponded with incredible gold market gains. I just read a great summary of where gold has been and where it is headed including how we got here, why the dollar has been the reserve currency and even explains the petrodollar and problems it may cause. This a fascinating article that I simply could not duplicate. Here is the link. I highly advise reading it.
After reading this article I believe that the fact that gold and silver have not yet skyrocketed should be a chance to buy now before the markets in general go crazy. Throughout last year I told clients that while I was bullish on gold, I believed we needed some time for the markets to accept that higher interest rates were a sign of inflation. The initial knee jerk reaction to the prospect of higher rates is negative for gold. We have seen that when gold has run up to as high as $1,950 and come back below $1,800. Gold will start moving up as investors realize that inflation is the focus, not interest rates. We have been seeing this since Thanksgiving. Don’t wait until gold and silver take off to add some to your portfolio. Buy while its cheap.

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  • Nick Grovich