VERUM Insights...

Why the Age of Paper Money is Ending

Imagine barreling down a curving mountain road at breakneck speed. You’re out of control and things are happening faster than you can possibly react. Another big curve is around the corner. You hit the gas and pray.

That’s the only image I could think of when I read this report from the US Treasury after completing my Friday research note to BPR readers. It’s a quarterly report prepared by an unknown committee whose job it is to pay for America’s spending habit; a thankless task that involves one word and one word only: debt.

How much?

Do the math.

The government in Washington—the people driving our national fun bus—will run yearly deficits of over $2 trillion for the next ten years. Both the Congressional Budget Office and the White House Office of Budget Management Agree on this. By 2036, in just ten short years, it will be $3 trillion per a year.

That’s nearly $25 trillion in NEW debt in the next ten years. That’s on top of the $40 trillion we already have. A minimum of $65 trillion in total debt. At that rate, the national debt will be close to 200% of GDP. And the worst part?

The interest on that debt will be over $16 trillion over ten years. It’s around $1 trillion per year now. It will be $2 trillion in ten years. That’s money that doesn’t build a single bridge or buy a single bullet or pay a new retiree’s Social Security.

Even if you receive some of that interest as income on bonds you own, do you really think it will offset the decline in the value of the US dollar? Or that the interest income you earn will be greater than the rate of inflation? Do you? Really?

Everyone knows this is unsustainable. But Washington acts as if it is a problem for later. This is a big mistake for investors and savers. And it’s not true either. Why else do you think the gold price has doubled in the last two years?

We’ll have more on gold, debt, Iran, AI, and ‘megapolitics’ this coming week at BPR. In the meantime, please enjoy the summary of all the research we published in the last week.