The Big Risk...

China Repeats Our Warnings About Treasuries

Something is about to break.

And even if you think you’re ready for it, you’re not. Before the end of this decade, the U.S. federal government and the entire banking system will face its biggest crisis since 1933.

The size and scope of Americans’ dependency on the government – which has grown consistently, year after year, since President Lyndon Johnson’s “Great Society” programs – has overwhelmed the government’s ability to fund these programs with taxes.

Again and again over the last 15 years, the government has funded itself, in ever growing amounts, by printing money to buy its own bonds.

This ongoing, insidious inflation has destroyed the middle class and left most Americans trapped in an economy where prices continue to rise much faster than wages. As a result, most people under 40 no longer believe in the American dream and see collectivism and socialism as the only viable path forward. That’s the thing about corrupting the money. It doesn’t only harm the economy. It corrupts the entire society.

The Weimar hyperinflation of 1923 wasn’t just an economic crisis – it was the systematic destruction of Germany’s middle class and the social order that held society together.

When the government chose to finance its deficits by printing money rather than raising taxes or cutting spending, it unleashed a monetary catastrophe that would reshape German society forever. By November 1923, it took 4.2 trillion marks to buy a single U.S. dollar.

Teachers, engineers, and civil servants who had saved their entire lives watched their nest eggs become worthless overnight. A lifetime of prudent saving couldn’t buy a loaf of bread, while speculators and debtors who had borrowed heavily found their debts evaporated by inflation.

The psychological trauma went far deeper than the economic devastation. The German middle class had built their identity around thrift, hard work, and delayed gratification – values that hyperinflation made not just useless but actively harmful. Those who had played by the rules were punished, while those who abandoned fiscal responsibility were rewarded.

This wasn’t just monetary policy gone wrong – it was the foundation for political extremism that would follow. When money loses meaning, society loses its anchor, and people become desperate enough to embrace radical solutions. The lesson remains: sound money isn’t just about economics, it’s about preserving the social fabric itself.

– Handre van Heerden

America’s social fabric isn’t going to be destroyed. It already has been destroyed.

OnlyFans, a social media platform that facilitates prostitution, has exploded from a start-up in 2016 to a $7.2 billion revenue behemoth. And, since COVID, revenue is up 2,570% with 1-in-10 women under age 30 having active accounts. Americans spend more on OnlyFans than they do on the #1 selling newspaper and #1 AI platform… combined.

Gambling? Sports betting – once a fringe, illicit activity in most communities – has ballooned to $200 billion in annual wagers, generating $17.6 billion in bookmaker wins and $3 billion in taxes.

But what happens to young men when both porn and gambling are available, privately, on their cell phones?

Nothing good.

Marijuana dependency?

Daily or near-daily marijuana use has grown from less than 1 million Americans in 2008 to over 20 million today, a 2,000% increase. And most of these daily users are men.

This is only the beginning. Imagine what will happen to our society by 2030 when the Social Security Trust Funds are fully depleted, and college-educated young men can’t get a job because of artificial intelligence (“AI”) – unless it’s in nursing. (See the data point #2 below, in the “3 Things To Know…,” about where all of the job growth is in America today.)

President Donald Trump promised to reduce wasteful spending and, by doing so, restore some fiscal discipline. And he’s tried: 10% of the federal workforce has been cut. He promised that U.S. foreign trading partners would pay tariffs to boost revenue. And through more economic growth, the federal deficit could be controlled.

But it isn’t working.

In this fiscal year, government revenue is way up (+12%), but spending continues to grow, most importantly spending on Social Security, Medicare, and Medicaid – up 9%. Interest on the debt is up 13%. Veterans affairs (mostly healthcare) is up 12%. Overall, spending is up 2% so far this fiscal year. Nothing stops this train. We’re heading for a $1.7 trillion deficit this year. Outside of COVID, wars, and the Global Financial Crisis, America has never seen deficits on this scale before. And yet, for the last three years in a row (2023, 2024, 2025), and now, for the fourth, we’ll see federal deficits in excess of 5% of GDP.

Just in these last four years (including 2026), the federal government will have grown total debt by 25% ($10 trillion).

This is the doom loop. What’s driving these deficits isn’t a bad economy, a banking crisis, or a war. What’s driving these deficits are failed policies that are not affordable and the lack of any accountability to the public by our government.

The government’s solution? More money printing.

The Fed is now printing up $40 billion a month to purchase U.S. Treasury bills under the euphemism of “reserve management purchases.” The actual reason is far more urgent. With $9 trillion in maturing Treasuries needing rollover in 2026 alone, the fiscal demands are crushing. Interest on the nearly $40 trillion in debt will be well over $1 trillion this year.

Even the people who have benefitted the most from the financialization of America, like BlackRock CEO Larry Fink, are warning that the printing is going to get out of control. In his annual shareholder letter this year, he wrote:

If the U.S. doesn’t get its debt under control, if deficits keep ballooning, America risks losing that position to digital assets like Bitcoin.

Again, that’s not something that might happen in another 10 years. What Larry Fink didn’t dare admit is that’s already happening as central banks around the world continue to dump Treasury bonds and craft new trade agreements outside of the dollar-based, global financial system.

The most notable such agreement, the Brazil-China trade deal, is a clear threat to America’s global financial hegemony. By bypassing the U.S. dollar completely, the deal promotes the use of the Chinese yuan in international settlements, as seen in similar pacts with countries like Russia and Saudi Arabia. Today, more than 40% of Brazil’s bilateral trade is settled in yuan, up from near-zero four years ago. Brazilian exporters, especially in sectors like agriculture and commodities, have increasingly adopted yuan for transactions, reducing currency conversion costs and exposure to the dollar.

Secretary of State Marco Rubio is now publicly warning that the dollar is under dire risk of being replaced as the primary means of settling global trade.

It is stunning that every American isn’t aware of these risks and that every American isn’t doing whatever it takes to limit our government’s ability to print and borrow. The facts are obvious and indisputable: we cannot afford the promises the U.S. government has made. They must be reformed, or they will destroy us all. Former British Prime Minister Margaret Thatcher’s warning is the perfect summation: socialism only works until you run out of other people’s money.

I suspect that we are entering the final phases of what will be the largest “blow off top” of all time in the financial markets, as the government will continue to produce prodigious amounts of new credit, while printing money to pay for it. This will, in the short term, reward speculators who flee the dollar into financial assets. But, in the end, it will cause an enormous collapse that will dwarf even the Great Depression.

My advice? Enjoy it while it lasts. And make sure you continue to buy gold.