by James Hickman via Schiff Sovereign

Yesterday the Treasury Department announced that they expected to increase the national debt by a whopping $760 billion this quarter alone… and another $202 billion next quarter.

In short that means almost $1 trillion added to the national debt just in the first half of this year. And, again, these are the Treasury Department’s own estimates.

Obviously, that’s a pretty horrible result; even a senior Treasury official acknowledged that they have “significantly increased” their bond sales and the national debt. Not that they’re doing anything to stop the trend.

But there’s an even greater risk that the Treasury Department faces this year that is hardly being discussed anywhere.

Over the next twelve months, more than $6 trillion in existing US government debt is set to mature… and will need to be paid back somehow.

So, to give you an example, back in 2014, the federal government issued $264 billion in 10-year Treasury notes.

Well, it’s now 2024, i.e. ten years later. Meaning that $264 billion worth of 10-year notes issued in 2014 will become due and payable this year.

In 2017, they issued $368.8 billion worth of 7-year notes. And those 7-year notes issued in 2017 are due and payable this year.

You get the idea. The point is that the total sum of Treasury Bonds, Notes, and Bills outstanding that will become due and payable this year exceeds $6 trillion.

So, in ADDITION to the $1 trillion in NEW debt that they’re forecasting just in the first six months of 2024, the Treasury Department is also going to have to pay back $6 trillion of existing debt.

Naturally the Treasury Department doesn’t have $6 trillion lying around to pay back its bondholders. So instead of paying anyone back, they just borrow new money to repay the old money.

Now, this doesn’t actually increase the national debt. If they borrow $6 trillion in new bonds, but then pay back $6 trillion in old bonds, the net change to the debt is ZERO.

So, what’s the problem?

The problem is that interest rates are MUCH higher than they were 2, 3, 5, 7, and 10 years ago when those old bonds were first issued.

In 2021, for example, the Treasury Department issued almost $1 trillion in 3-year bonds back when interest rates were nearly 0%.

But since those 3-year bonds from 2021 are due and payable this year, the Treasury Department will have to borrow new money at today’s interest rates… which are hovering around FOUR percent.

And higher interest rates mean that the government’s annual interest bill will soar.

Think about it like this– $6+ trillion of existing debt needs to be refinanced. And given how much higher interest rates are, this will likely cost the government more than $200 billion per year in additional interest payments.

PLUS, they’re expecting $1 trillion of new debt in the first six months of the year, plus probably another $1 trillion in the second half of the year.

Altogether, the government’s total interest bill could easily increase by more than $300 billion per year in 2024.

And this same trend will continue in 2025, 2026, and beyond.

Right now, gross interest on the debt is already roughly $1 trillion per year. But in three years’ time, annual interest could surpass $2 trillion annually. And in 10 years, annual interest could reach $4 to $5 trillion.

Anyone who thinks this isn’t an obvious, catastrophic problem in the making (which demands immediate attention) needs to have his/her head examined.

And yet the government is full of people who shake hands with thin air and happily ignore the present and future carnage that they’re creating.

Don’t hold your breath for the Inspired Idiots in charge to fix this; I’ve written before that there is a VERY narrow window of opportunity to solve this problem… but they’re doing absolutely nothing about it.

But that doesn’t mean that you or I have to be held hostage by their incompetence.

I’ve argued that one of the highly probable consequences of this mess will be SIGNIFICANT inflation. After all, most likely it will be the Federal Reserve that facilitates all this new debt.

This is what the Fed has done for most of the past 15 years. Just look at the huge run-up in the national debt between 2020 and 2022; over 80% of that money (~$5 trillion) came from the Federal Reserve.

And if creating $5 trillion in new money resulted in 9% inflation, how much inflation will we see if the Fed creates $15 to $20 trillion of new money? No one knows for sure, but it probably won’t be 2%.

But if we can make such a strong argument for inflation… and anticipate a steep rise in prices over the next 5-10 years, there’s no reason why we can’t take steps NOW to reduce the impact of future inflation, or even benefit from it.

This doesn’t even necessarily require a lot of capital. For example, one could invest in long-term options on certain assets (including gold or silver futures), so that a small amount of money could pay out very large returns down the road.

The key point is that there are plenty of sensible ways to plan for future inflation, which we will continue to discuss in future letters.

But this isn’t even Plan B thinking anymore. Anticipating inflation should be Plan A.

by OAN’s Elizabeth Volberding

While Wall Street is setting records, those on Main Street claim to be barely scraping by. Many citizens even maintain that they are “living paycheck to paycheck,” according to the latest Issues and Insights/TIPP Poll.

According to an Issues and Insights/TIPP (I&I/TIPP) Poll that was released on Wednesday morning, 64%, or two-thirds of American voters, stated that they are “living paycheck to paycheck.”

I&I/TIPP is known for reporting “timely, unique, and informative data” every month regarding a wide range of topics that interest the general public, according to their website.

In the most recent I&I/TIPP Poll, which was conducted from January 3rd through January 5th of this year, among 1,401 registered voters, representing nearly two-thirds of Americans, stated that they are “living ‘paycheck to paycheck’ these days,” despite the fact that the United States is still considered to be a wealthier nation in comparison to other countries.

The margin of error for the poll was +/-2.6 percentage points.

Democrat politicians appear befuddled by the overall disregard for what they perceive to be “Bidenomics’ achievements” regarding the economy. However, Americans are still facing extreme financial hardships, even if the economy has recovered slightly since the COVID-19 era.

The surprising outcome comes at a time when many politicians and members of Wall Street are praising new data that claims strong growth in the fourth quarter, as well as a slowing rate of inflation.

However, in the poll, 63% of Democrats, 67% of Republicans, and 62% of Independents said that they are “barely getting by” with each paycheck they receive.

Additionally, 53% of poll-takers in the wealthiest income bracket, which include those who make at least “$75,000 or more” annually, also maintained that they struggle to make ends meet on a monthly basis. The wealthier earners blamed childcare, housing, food, travel, and entertainment expenses.

68% of American voters with lower incomes, defined as those earning less than $70,000 annually, also said that they were struggling to make ends meet. Nonetheless, that polling result was less surprising.

In terms of race, 62% of White Americans and 69% of Black and Hispanic Americans similarly admitted that they are facing “financial difficulty with each paycheck.”

The I&I/TIPP Poll posed an even more dire question, “How much money do you have in savings that you could use in an emergency?” in an effort to bring more attention to this issue.

Individual responses were used to group the answers, which were according to dollar value:

The following categories available were: “$0,” “less than $1000,” “1,000 to $4,999,” “5,000 to $9,999,” “10,000 to $19,999,” “20,000 to $49,999,” and “$50,000 or more.” An alternative response would be “prefer not to answer.”

As a result, the answer of this question was a worrisome 24% of all Americans who responded “$0.”

At the same time, 14% responded with less than $5,000, and 20% gave a response of less than $1,000. Of the respondents, 44% had less than $1,000 or had none at all. Even after accounting for the wealthiest citizens of the United States, the median savings amount was only around $1,586.

In conclusion, Americans seem to be unprepared for any sort of financial emergencies, at least in economic terms.

The data is shocking to many, especially considering the fact that politicians on both the right and left continue to tell U.S. citizens that “they’ve never had it so good,” which is far from the truth, according to economists.

“Experts, from the time I got elected, were insisting that a recession was just around the corner. Every month, there was going to be a recession,” President Joe Biden said on Saturday, chuckling as he mentioned the fourth quarter’s 3.3% GDP growth.

Due to this, Americans lack a safety net to shield them from sudden drops in the economy.