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Ripple Effect

The Making of a Credit “Event”

Loading ...Addison Wiggin

May 28, 2025 • 1 minute, 6 second read


credit defaultcredit event

The Making of a Credit “Event”

When DOGE can identify hundreds of billions of dollars in waste, fraud and abuses… and… the budget deficit grows?

Well, investors get uppity.

That’s why the global bond market is sending yields soaring.

Another danger? Credit default risks are on the rise in the U.S. – their highest level in over a year.

Turn Your Images On

We may not be at a crisis point yet – but the trend is clear.

Credit markets continue to flash warning signals while investors have a “risk-on” approach to assets. That game of musical chairs won’t end happy for them.

~ Addison

P.S. We’ve recently released new research on today’s markets, and how President Trump is following through on a Great Reset of the U.S. economy. This first phase isn’t pretty – we call it the Great Fire – of which today’s rising credit risks are certainly a part. Click here for more details on how it could play out.

Plus, for our members, we’ll have our weekly Grey Swan Live! video tomorrow. Andrew Packer will be joining us from Las Vegas, where he’s attending Bitcoin 2025. We’ll talk all things bitcoin – and there have been plenty of developments so far already.

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)


The Grand Realignment Gets Personal

January 13, 2026 • Addison Wiggin

Sunday night, Powell addressed the probe head-on in a video post — a rarity. He accused the White House of using cost overruns in the Fed’s HQ renovation as a pretext for political interference.

The White House denied involvement. But few in Washington believed it.

What followed was bipartisan condemnation of the investigation. Greenspan, Bernanke, and Yellen co-signed a blistering rebuke, warning the U.S. was starting to resemble “emerging markets with weak institutions.”

The Grand Realignment Gets Personal
A Rising Sign of Consumer Stress

January 13, 2026 • Addison Wiggin

Estimates now indicate that the average consumer will default on a minimum payment at about a 15% rate – the highest level since a spike during the pandemic lockdown of the economy.

President Trump’s proposal over the weekend to cap credit card interest at 10% for a year won’t arrive in time to help consumers who are already missing minimum payments.

Not to fret, the other 85% of borrowers continue to spend on borrowed time. Total U.S. household debt, including mortgages, auto loans, student loans, and credit cards, reached record highs in late 2025, exceeding $18.5 trillion. This surge was driven partly by rising credit card balances, which neared their own all-time peaks due to inflation and higher interest rates.

A Rising Sign of Consumer Stress
Protest Season Amid the Grand Realignment

January 12, 2026 • Addison Wiggin

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.

Protest Season Amid the Grand Realignment
Breaking: Government Budgets

January 12, 2026 • Addison Wiggin

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.

Breaking: Government Budgets