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Category Archives: What Can’t Be Paid Won’t Be Paid

Debt-Based Monetary System Demands Ever More Debt—Part I


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The National Debt was basically flat from A.D. 1900 through A.D. 1971. In A.D. 1971, President Nixon closed the “gold window” and the dollar became a pure fiat/debt-based currency.  Since A.D. 1971, the National Debt has persistently increased, without regard to which political party controls the government.  I strongly suspect that a debt-based monetary system cannot survive without government creating more debt.  Once the dollar was debt-based, the National Debt had to increase.

The Congressional Budget Office (CBO) recently released a 55-page report on the “long-term US budget outlook”. The report implied that the US government is on the road to fiscal chaos and possible collapse that could not be sustained beyond A.D. 2047.

I think the CBO is lying about the “long-term” budget outlook. Instead, I think we’ve only got a “short-term” to go before the debt hits the fan.

According to the report, the “official” National Debt ($20 trillion) currently stands at the highest level since shortly after World War II. (The report did not comment on estimates by others that, including unfunded liabilities, the real National Debt may be closer to $100 trillion or even $200 trillion.)  According to the report, if government maintains current policies and economic trends continue, the debt will likely double over the next 30 years, rising to about 150% of GDP.

I see the CBO’s predictions and “warnings” as bunk, bunk, and, uh, bunk.

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What Can’t Be Paid, Won’t Be Paid


National Debt Creditors About to Lose their Assets [courtesy Google Image]

National Debt Creditors About to Lose their Assets
[courtesy Google Image]

I’ve argued for five years that the U.S. National Debt is too great to ever be repaid in full, or even by half.  My personal guesstimate is that at least 80%–and probably 90%–of the National Debt will inevitably be repudiated.  That repudiation will take the form of hyperinflation, express repudiation (“Sorry, boys–but we’re too broke to pay that debt.”), or perhaps even WWIII (a good war could wipe out virtually all memory and enforce-ability of the National Debt.).

Here’s a graphic that illustrates my argument.  If you take a few minutes to view the graphic, you’ll see the size of the U.S. National Debt is:

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1. Larger than the 500 largest public companies in America;

2. Larger than all assets managed by the world’s top seven money managers;

3.  25X larger than all global oil exports in 2015;

4. 155x larger than all gold mined globally in a year; and, my personal favorite:

5. Larger than all of the world’s physical currency, gold, silver, and bitcoin combined.
In other words, there’s not enough actual money and currency in the world to repay the U.S. National Debt.
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The Only Question


$20 TRILLION National Debt! [courtesy Google Images]

$20 TRILLION National Debt!
[courtesy Google Images]

On September 30th, A.D. 2016, the U.S. government closed out the 2016 fiscal year with an “official” National Debt of $19,573,444,713,936.79.

Makes me laugh.

Government can calculate the U.S. National Debt to the penny. How responsible!

And yet, government has no idea what happened to $6.5 trillion that was given to the Pentagon and subsequently disappeared.

In any case, the National Debt grew by $1,422,827,047,452.46 ($1.4 trillion) in fiscal 2016. That averaged out to over $100 billion in deficit spending per month.

That annual deficit spending increase has been a de facto $12,000 subsidy for every American household.

The fiscal 2016 deficit spending (debt) amounts to roughly 7.5% of the entire US economy. Without that 7.5% in debt-based “stimulation,” where do you suppose the economy would be right now?

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