America’s Ballooning Fiscal Gap Threatens to Blow Up Its Future

Lau Vegys, Doug Casey’s Crisis Investing

Today’s chart shows the path of U.S. government spending and revenues from 1989 to now, along with projections for the next 31 years.

See that gap between the lines? That’s where our debt comes from. Every year, when spending outpaces revenue, it’s like putting the difference on the national credit card.

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If you take a closer look, the late ’90s and early 2000s were the only time the government’s books weren’t a total mess. Revenues were up, spending was under control. We even toyed with the idea of paying off the national debt. Seems like a fairy tale now, doesn’t it?

But then the 2000s rolled in, and things took a turn. Wars, bailouts, you name it. The gap between what the government was taking in and what it was spending started to widen alarmingly. And just when we thought we’d seen it all, 2020 hit us like a freight train. COVID, lockdowns, stimulus checks galore. Government spending skyrocketed to 30% of GDP.

That was a recipe for a debt explosion, and that’s exactly what happened.

To put it in numbers, our national debt jumped from about $23 trillion at the start of 2020 to over $27 trillion by the end of the year. That’s a staggering $4.5 trillion increase in just one year! For perspective, it took the U.S. over 200 years to accumulate its first $4 trillion in debt.

At writing, we’re staring at $35.67 trillion and counting in national debt, with interest payments exceeding $1 trillion for the first time in history.

That’s grim, but the future doesn’t look any brighter. See that orange line stretching into the distance? That’s government spending, and it’s on an upward trajectory with no signs of slowing down. Meanwhile, the black line – that’s revenue – is barely budging. We’re looking at a gap that’s widening year after year, with no end in sight.

By 2054, we’re looking at spending levels above 30% of GDP with revenues hovering under 20%. This means we’ll be adding trillions to the national debt every single year, and that’s probably a best-case scenario. ~~ Lau Vegys, Doug Casey’s Crisis Investing

Lau Vegys, Doug Casey’s Crisis Investing

Today’s chart shows the path of U.S. government spending and revenues from 1989 to now, along with projections for the next 31 years.

See that gap between the lines? That’s where our debt comes from. Every year, when spending outpaces revenue, it’s like putting the difference on the national credit card.

Turn Your Images On

That was a recipe for a debt explosion, and that’s exactly what happened.

At writing, we’re staring at $35.67 trillion and counting in national debt, with interest payments exceeding $1 trillion for the first time in history.

These PM producers are literally printing the most ‘hard money’ that they ever have at these metals prices and record margins here at the midway point in Q4.

If there ever was a time for this sector to get overheated and frothy, this would be it… only that isn’t what we’ve seen playing out.

PM producers are still insanely profitable at even at current metals prices and should be far more valuable based on their margins, revenue generating potential, and their resources still in the ground.

Who stipulated that politics and money have to be serious?

We do, in fact, write about money, the economy and financial markets. It’s to our own peril if we ignore the “passing parade” and its impact on them.

Populism as practiced by President Trump and the MAGA crowd is equally as pernicious, in our view, as the open worship of collectivism as expressed by Mamdani, AOC, and the progressive snollygosters gaining momentum among younger voters.

The system, as it were, is broken in all kinds of interesting ways. But we still have to live in it. And make decisions about our lives… our money… our families and our future.

Increased margin levels for paper trading briefly knocked down the price. Time will tell if this slam in the light volume of overnight trading will hold over the long haul.

Let’s peel back the layers of this precious metals bull market by analyzing the pricing action on the charts, which contains ALL the buying and selling.

Most people love a good narrative, and they use these stories to either reinforce their biased views or to explain away price action that they don’t agree with.

They are just stories, though, even if there are elements of truth embedded within them. We can utilize charts to remove this biased narrative and noise.

Over the longer term, the pricing that populates charts truly incorporates the total buying and selling from all central banks, financial institutions, ETFs, hedge funds, whale investors, and the rest of the retail investors.