I am amazed sometimes how compliant and tractable the US mainstream media is. They will studiously ignore huge stories that don’t fit the current narrative.
Here’s my current favorite story that is getting a tiny fraction of the attention it properly deserves.
The US Government is planning to borrow one trillion dollars in the current quarter, and an additional 852 billion dollars in the fourth quarter of 2023, for a total of 1,852 billion dollars in the second half of this year, according to Reuters: https://www.reuters.com/article/usa-bonds-refunding-idUSL1N39H229
This amounts to borrowing roughly ten thousand million dollars per day every day for the next six months.
This is the equivalent of borrowing $30 per day for every man, woman and child in America, for a total increase in America’s indebtedness of $5,400 per US citizen in a mere six months.
America’s national debt will rise by as much in the next six months as it did during the entire first 209 years of the nation’s history.
Borrowing this much from the future to make the current economy look better than it is, is the financial equivalent of draining the Strategic Oil Reserve to keep gasoline prices low: a short-term fix with long-term consequences.
All of this is occurring at a time Americans are being told that Bidenomics has resulted in a strong, vibrant economy. If America is borrowing this much in what we are told is a good economy, how much more will America have to borrow if the economy slides into an extended recession/depression?
Who will loan the US Government that much money? Individual Americans are deeply in debt, as are US corporations. Many of America’s banks have lost so much money due to the falling value of their long US Government bonds, they are already technically insolvent.
Since America illegally seized Russia’s foreign reserves, a great many of the world’s nations are wanting to divest themselves of their US dollar reserves - not buy more!
Across Africa, Asia and South America, nations are making agreements to conduct trade in their own currencies, bypassing US dollars - and further reducing their need to hold US dollar reserves.
It might be easier for America to borrow such a huge wad of cash if the planet weren’t already 300 trillion dollars in debt. America is competing with a lot of other desperate debtors.
The question is not whether the US will be able to borrow the money. The question is: At what cost? Borrowing that much money in that short a time is bound to push up interest rates even higher.
Much of the US Government’s debt is short term. It is well within the realm of possibility that interest on the US Government’s debt could hit a trillion dollars by this time next year. If that happens, interest on the debt will become the US Government’s single largest expense.
Pushing up interest rates will cause long-term US bond prices prices to fall even further - pushing more US banks into insolvency.
Commercial real estate owners is already in deep trouble. What happen when their borrowing costs skyrocket? And what happens to the regional American banks that hold most of those commercial real estate loans?
Higher interest rates will also be a heavy drain on an American economy that was already lurching towards recession. The US borrowing so much in so short a time will also stress other parts of the global economy.
All of the above is likely to put downward pressure on the US dollar, although crises in other currencies could buoy it up in the short term.
I can’t tell you specifically what will break, or when. I can say with reasonable certainty that this will not end well.
Hey, no problem. We'll just print a LOT more money! Better yet, we'll switch to digital currency and the government can magically "create" money out of thin air without even having to overwork the printing presses. What could possibly go wrong? The "experts" in charge and in the media tell us that this won't devalue the dollar or continue to drive up that "transitory" inflation. Surely we can trust the experts, right?