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I leaned a bit out of the window and anticipated doom on Twitter:
https://x.com/DefenceFreedom/status/2016438597230961078
The U.S.' public debt amounts to about 38 trillion dollars. About 9 T $ need to be refinanced in 2026 and about 2 T $ new debt needs to be financed in 2026.
The monetary and foreign policies of the lying moron discourage foreigners from buying dollars or lend money. So who is going to finance the U.S.' excesses? The U.S. treasury ("printing" money) is the prime candidate.
2027 will be worse. Less debt to refinance, but the refinancing of 2026 will only be possible at much higher interest rates (and probably inflation-indexing), so the debt service will be crushing. The deficit may be around 3 T $ in 2027.
Yes, I know about fiscal years not being the same as calendar years, but I am writing about the financing of the budget during the calendar year here.
Back to the money "printing": Money creation to fund a substantial share of a country's government leads to high inflation, possibly hyperinflation. The degre of economic literacy at the top of the U.S. government already led to attacks on the central bank's independence.
A demand for low interest rates by the central bank is an almost obvious policy to come, so there's no way the central bank can credibly fight inflation.
Keep in mind trillions of $ are likely to flow back to the U.S., as their holders fear loss of value.
Trade cannot cope with this. The dollar will become extremely weak. So extremely weak that inflation of imported goods will provoke exchange rate interventions, burning foreign exchange reserves for no gain.
A weak dollar may be good for exporting U.S. businesses, BUT the U.S. lacks the economy and skilled labour force to quickly expand its industry within two or three years to exploit an export-friendly exchange rate quickly.
Something else will be very quick, even near-instant: Importing will be very expensive with a weak dollar. This may wreck industries that have globalised supply chains.
The U.S. was on a bad path trade-wise for about 25 years already. Now there's a cabal of idiots in charge that don't understand that keeping what you have is demanding at that level, throw away what they have and thus become the trigger of collapse.
Unsustainable waste such as the insanely big military budget gets grown instead of cut back. Foreign lenders lose motivation to fund the U.S. lifestyle of living off credit. The USD loses its dominant reserve currency status.
The chicken comes home to roost. They make America small again.
On the other side of the Atlantic, Poland-Lithuania won't take over the once-dominant role of the U.S.. China will do & in ~20 years India will challenge China. Most people in Poland-Lithuania will enjoy a nice life in wealth & security - if the climate allows for it.
True prosperity comes form work and avoiding waste, not from living off cedit. Superpower or even only Great Power status is not needed for prosperity, as evidenced by countries such as Luxembourg, Brunei, Singapore.
Americans may have a fine life once they reach an approximately sustainable path, including taxing the rich for real again. Their next 5-8 years won't be nice, though.
I disinvested from a MSCI World ETF two days ago. It was always the plan to not try to beat the market, but I wanted to get rid of the extreme exposure to the USD and the U.S. and am moving to a MSCI World ex US ETF.
The U.S. trade balance deficit, federal budget deficit and military spendingwere on about one level for a while, hinting that the U.S. can actually not sustain its consumption (which includes the government consumption of military power expenditures) without perpetual willingness of the rest of the world to give lend money. The lying moron's policies are now the trigger to end this willingness - and it was always ridiculous to assume it would be perpetual anyway.
The upside? The PRC is most unliekly to make a violent move to get Taiwan in the next three years. It can instead wait for the Americans to collapse fiscally and economically. Purges in the armed forces to ensure loyalty tot he Fascist regime as well as the stupidity at cabinet level will reduce military capability beyond any budget crunch that's going to happen when the economic base falters.
S O
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