Breaking: Government Budgets

What do you get when you roll over a five-year bond from 2021 to 2026? You get far higher interest rates.

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Payments on government debt continue to soar amid high debt levels and relatively high interest rates (Source: econovis.net)

Total municipal, state and federal debt service costs soared to nearly $1.5 trillion in the third quarter of 2025. Debt’s easy to accumulate when rates are low. Trouble is, you are obligated to refinance them even after rates go up.

It’s also a key reason why the Trump administration is demanding lower interest rates – even if it means reigniting inflation.

As long as rates are trending lower, like they did from 1980 to 2020, government debt appears manageable. If, as our own Andrew Packer has suggested, we’re at the start of a 40-year secular cycle of rising interest rates, government debt across the Western world, debt itself will force voters to rethink what they ask their government to do. (See: Grey Swan 2026 Forecast #7)

~ Addison

P.S. Last week, we wrapped our first Grey Swan Live! of the year, with Matt Smith, publisher at Casey Research. Matt and co-author Doug Casey have just released a new book titled The Preparation: How to Become Competent, Confident and Dangerous.

Our conversation with Matt was fantastic – on a different plane than our usual Live! themes and a great way to kick off the new year. It’ll be well worth your time to listen to the replay, which is posted to the Grey Swan Live archive in the members’ section.

We’re also recommending members buy a copy of The Preparation for a young man in their lives. And we’ll have updates on this week’s Grey Swan Live! soon. Stay tuned.

What do you get when you roll over a five-year bond from 2021 to 2026? You get far higher interest rates.

Turn Your Images On

Payments on government debt continue to soar amid high debt levels and relatively high interest rates (Source: econovis.net)

It’s also a key reason why the Trump administration is demanding lower interest rates – even if it means reigniting inflation.

~ Addison

We’re also recommending members buy a copy of The Preparation for a young man in their lives. And we’ll have updates on this week’s Grey Swan Live! soon. Stay tuned.

There’s an old Wall Street maxim: “Don’t fight the Fed.”

This year, you could add a Trump corollary.

A wise capital allocator doesn’t fight that storm. He doesn’t argue with it. He respects it the way sailors respect the sea: with preparation, with humility, and with a sharp eye for what breaks first.

In 2026, the things that break first are the stories. The narratives. The comfortable assumptions.

The “Donroe Doctrine,” the White House is calling… because Trump hasn’t yet stamped his name on every facet of U.S. political life.

America in the Americas. China in East Asia. Russia, where Russia still can.

There is a certain gangster logic to it. Not the UN Charter. Not the Magna Carta. More Godfather than Geneva.

Markets, predictably, shrugged.

Oil stocks rallied. Defense stocks jumped. Consultants booked flights to the oil fields near Lake Maracaibo and the Orinoco Belt.

Interest rates are coming down, emboldening consumers to take on more debt.

The latest data highlights a central feature of the real economy. Americans no longer manage savings and income but credit cards, HELOCs, and mortgages in an effort to keep up appearances.

Day-to-day expenses, health insurance, housing, car payments and tuition will continue to plague Americans throughout the year ahead of going to the polls in November.

Roughly 70–80% of global silver supply comes as a byproduct of mining other metals—copper, lead, zinc, gold. This means that even if silver prices doubled tomorrow, production wouldn’t automatically increase unless mining of those other metals ramped up too. You can’t just “decide” to mine more silver.

Layer China’s export controls on top of all that, and you’re looking at a supply profile that’s unusually tight—and unusually vulnerable.