In today’s update we look at yet another ‘Punch and Judy’ American election farce which once again ignored the ‘Elephant in the room’ – the inevitable U.S. $121.7 trillion debt crisis and the coming global $250 trillion debt crisis.
We briefly look at the outcome of the elections, how markets have reacted in the short term and more importantly the long term outlook for markets and the dollar
We examine the “Punch and Judy” farce that were the American elections this week in which both the politicians, the media and the people again managed to completely ignore one of the greatest financial, economic and societal challenges facing the U.S. and indeed the world – the coming U.S. and global debt crisis.
Trump said he would erase America’s debt in 8 years. It’s now bigger than ever. When this promise was made, the national debt stood at $19 trillion. When Trump became President the US National debt was just below $20 trillion; it has since risen to $21.7 trillion.
During Obama’s presidency, the total national debt has risen from $10.6 trillion to nearly $20 trillion.
This debt is just the nominal national debt and there is also the not insignificant matter of the between $100 trillion and $200 trillion in unfunded liabilities – for medicare, medicaid and social security. As the Baby Boomers retire, these liabilities are coming due in the coming years.
The U.S., like the EU and most western nations, is “kicking the can down the road.” Consequently, a U.S. and global debt crisis looks likely in the coming months and years.
Trump was elected on a promise to reduce the debt and government spending including that on the military and the Deep State. Not only has he failed miserably in this goal – he had done the opposite. He has not been a man of his word and like a lot of politicians – both Republican and Democrat, left and right – he talks the talk but completely fails to walk the walk!
Politics in the U.S. and globally has been reduced to a modern ‘Punch and Judy’ show. It is akin to a kids puppet show in which the competitors beat each other up and it is a distraction for the child like electorate. The politicians resemble mere puppets to corporate and Wall Street vested interests who are ‘pulling the strings’ and enriching themselves from behind the political stage.
This is happening at the expense of individuals, families, farmers, entrepreneurs, small and medium size enterprises, less politically connected corporations and banks and ultimately society itself.
Massive military expenditures are justified – nearly half of U.S. government expenditure now goes to the arms industry – by scaring the people with the latest bogeyman du jour. There are evil villains every where as the Deep State and their corrupt and idiotic politicians and a compliant media who do the fear mongering of the Deep State. Constant political and media fear mongering and “cat calls” of “look behind you” at the latest enemy of the day.
The lists grows longer by the day:
Evil Russia in Soviet era to evil Saddam Hussein and Iraq (once an ally) to Gadafi in Libya (once an ally) to North Korea (who were an existential threat and evil one week and then became allies more recently and “Little Rocket Man” may become an enemy again if necessary) to evil Muslims everywhere (except fundamentalist Saudi Arabia who West sells arms to) to evil Russians again in recent years, and now we appear set for an even bigger enemy – those evil Chinese who are now hacking our devices and trying to monitor us. Western governments would never do such a thing!
Tweedle Dum Tweedle Dee: During the 2000 United States presidential election, candidate Ralph Nader claimed that George W. Bush and Al Gore were not very different in their policies and how they had become captured by corporate and Wall Street interests. He rightly called them the parties and candidates – Tweedledum and Tweedledee.
Trajectory towards empire is inexorable and now has a momentum and life of its own alas. Ralph Nader, Ron Paul were opportunities to change the trajectory which were not embraced unfortunately.
Ultimately all of this bodes badly for the US, its economy and the US dollar.
The threats posed to the U.S. dollar as the global reserve currency of the world and the coming dollar and fiat currency devaluations as currency wars intensify make owning physical gold in the safest ways possible essential to all who wish to preserve wealth in the coming years.