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Debt troubles

Since the end of the negotiations on the debt ceiling on June this year, the US federal debt has increased by $1.5Tn to $33Tn in a little more than three months, which translates into an 18.5% annualized growth. Meanwhile, the US gdp is growing at a real rate of 2%, and around 5% in nominal terms, with current inflation. Debt is currently growing 3.5X faster than gdp. Federal debt to gdp ratio is 130%. The #cbo keeps projecting a growing budget deficit for the US for the foreseeable future, to an unsustainable path. To put it in perspective, if the US were to back those $33Tn of debt with #gold at current prices, it would need 531,718 metric tons of it. The problem is that ALL gold discovered to date amounts to 244,000 metric tones, or half of what’s needed. After almost 2 years fighting inflation, when would the U.S. goverment realize the only way they can decrease and/or repay the debt is through financial #repression, or using inflation to deflate the debt?


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Source: Tavi Costa, Crescat Capital.



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