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.

The stock market “rebalancing” is a polite way to put it. Energy and health care are getting a healthy boost. But tech hardware and software makers are still getting dressed down and have been asked to report to the principal’s office.

The great rotation underway has triggered a series of “Hindenburg Omens.” Five have occurred in recent weeks.

The S&P 500 has traded in a 3.7% range over the past two months — less than half the 20-year median of 8.6%. One of the tightest ranges in modern history.

In trader parlance, the indexes are “flat,” a setup that often materializes before a sell-off at the top after a multi-year bull market.

Goldman Sachs told its own traders to be aware that institutional trading activity resembles a VIX reading near 35. Rather than a reading of 20, where the VIX has been trading over that same 2-month period.

The U.S. software ETF, IGV, tested its April 2025 lows last week and trades roughly 35% below its peak. The “SaaS-pocalypse” in software companies reflects the fear of Citrini’s 2028 scenario happening in real time. That divergence now exceeds the spread seen at the peak of the Great Financial Crisis.

Under the surface, the “great rotation” we wrote about last week is threatening to widen.

Despite its overly-educated 40-million-plus population, on a GDP per capita basis Canada is null. Collectively, the Great White North would rank as America’s second-lowest state, coming in above Mississippi, but below Alabama.

SpaceX is the most valuable private startup in history — and if its success continues, it might become the most valuable public company in history.

After all, as Musk famously said in 2023, “I have never lost money for those who invest in me and I am not starting now.”

For investors, SpaceX has been a wild, joyful ride — and now the journey continues!