The reality of where we’re heading.

Topics covered in this article:

- The reality of a default on the US debt.

Ask yourself this, how long until the US government are able to repay the national debt?

If you answered never, then congrats you've been paying attention. At over 31T $, there is no hope of repaying the national debt. I mentioned this in my previous article about the current implications of the unfathomable debt in America but today I'm going to properly list the implications of what this means for not only us but future generations if this carries on.

The usual belief all of us have right now is, it'll never happen, but I'm here to tell you, if it doesn't happen, it only gets worse.

So now we can establish that any reasonable person can admit there is no hope of ever paying back the national debt. We have to now question why top politicians, CEOs and more are telling us that we need to raise the debt ceiling. Something doesn't add up but can you work out what it is? Why is it viewed as insane to even consider defaulting on a debt that we've already established is inevitable to default on? If we have no hope of defaulting, then we must grow this debt on and on without end.

First off let's look at the likely scenario that plays out like always with these things. There are likely to be months on months of political talks and pointless speeches with both parties, where democrats are going to demand that everyone is relived and given free money whilst republicans pretend they care about cutting spending when they don't, then on the last day a new bill is passed where trillions of $ of new spending is provided and the government claps their hands and all is forgiven.

The outcome of kicking the can down the road:

As established already, a default on the US debt is actually very serious. It's a big deal. So what if we carry on as we are now? what happens? Does everything stay as it is?

Well, I'm here to enlighten you that no, it will in fact become a lot worse. Inflation being one of the main driving factors of this. Do you think life was bad when inflation was 9.1% in 2022 y/y? Think about the fact that in Germany in 1920, inflation peaked at 29,000% a month! This is the road we're heading on with this endless cycle of expanding debt in the US. This is coming from me living in the UK currently. What people fail to understand is that the US is the bedrock of the financial system, so any implications here ripple across the rest of the globe.

Think about the fact that now, the average person has to make 2x the money to maintain the standard of living of his or her parents. Also, the fact that now both parents now have to work full-time to maintain their standard of living in this current day and age. Imagine what it will be like for the next generation. Also, think about how every single person born today immediately has $95,000 in debt the moment they are born. This only gets worse as the debt grows.

Ok so what if the US default on its debt?

Well, I'm afraid to say, this is still not a great option but it's the only other one we have. Taking an extract from a 2021 presentation by the White House they listed the implications defaulting on its debt would have for America and the world. They stated that a default “would hinder the federal gov from serving the American people” as well as listing many reasons such as “payment from the federal gov that families rely on would be in danger.” and “maintaining national defence would be at risk”. Even things such as health coverage and social security would fail. But none of those are reasons why it's crazy to consider a default on the US debt. A lesson on the national debt real quick… This debt is made up of US treasuries which are essentially the bedrock of the financial system. Our financial system is debt-based and debt requires collateral. US Treasuries are the most common most secure form of collateral that's in use today. It's referred to as pristine collateral. If pristine collateral is suddenly not pristine anymore, it flips the whole financial system on its head. Do you see where I'm getting at now?

If you want to know what this looks like just look at 2008. Mortgage bonds (mortgage-backed securities) used to be considered pristine collateral and then all of a sudden when people stopped paying their mortgages suddenly that collateral wasn't pristine anymore and nobody was willing to hold or lend money against it. All that credit froze up, interest rates spiked overnight, and banks started to fail. That's just a little taster when pristine collateral loses its safety. At this point, US treasuries collateralise way more debt than MBS did in 2008. So understand that the US gov defaulting doesn't just mean families not getting food. Whilst this is serious, it also means widespread bank failures and your bank not providing you with your hard-earned money. The FDIC does not have enough money to shore up all the banks in the US and if congress was unable to borrow more money and give it to the FDIC then they wouldn't be able to provide either. This means under a Gov default you'd lose your checking account, your 401K, your job most likely which also means your house, and your pensions. ETFs would be wiped out and the stock market would plunge.

So you see, under this scenario, most people would lose 90–99% of their net worth. This may be a better outcome for the average person. I say this because for years now we have just arbitrarily raised the debt ceiling and increased gov spending as well as inflating the currency away to the point where its lost more than 90% of its value in 100 years.

So what scenario is worse? Us losing 99% net worth in a depression that is deflationary or make our kids $100,000 in debt the moment they're born. The refusal to deal with this problem is sentencing future generations to financial slavery. So you can sit there and say im crazy but the alternative is to keep kicking the can down the road and sentence future generations to pay off the current standard of living at their own expense. To me, that sounds like the crazier option.

Now, here's where you can say I'm getting my tin foil hat on but everything I've laid out so far has been factual so hear me out. Think of this, the ones calling everyone crazy to even consider a default on the US debt as an option are the same people gathered in Switzerland (the WEF Davos23).

Those same people have become extremely wealthy with this inflationary system. It's no secret inflation hurts the poor who spend almost all their income on food, energy and shelter meanwhile the people who provide all those things because they own the businesses and assets that provide that food energy and shelter get even richer. People who are telling us it's crazy to consider changing course are the ones who are benefitting most from the course we’re on. They're also lying to us saying a default would be unprecedented.

The US has a long history of defaulting on its debt. The first instance in 1862 when the US in order to finance the civil war issued greenbacks which were bank notes redeemable for gold and silver coins. But the gov published too many of them and instead of allowing people to redeem those for gold and silver they defaulted on their promise and instead made those bank notes legal tender. Fun fact, that's why to this day, every federal reserve note says, this is legal tender for all debts public and private.

Oh and btw, the sec of the treasury who defaulted on the greenbacks was Salmon P Chase, the very same guy who has a bank named after him. In fact, CEO of JPM, Jamie Dimon bank recently stated at Davos23 that the US defaulting on its debt wont happen. lol

Now I could go on about how the US has historically defaulted on its debt but long story short, I get it, it's crazy to consider the US gov defaulting on its debt but i think its even crazier to think they won't too. A default on US debt would be catastrophic financially, with bank failures, bank runs and most people getting wiped out. But the course that we’re currently on is not fair for future generations. The ones saying its crazy to consider a default are the same ones getting extreme wealth.

For people who have followed me on snapchat, you'd know that the way I see it now is that we will carry on until the people at the top have amassed a crazy, unfathomable amount of wealth and divided the poor/middle and rich class separating the divide to points which cannot be fixed. This is where the agendas win, the WEF wins and the reset occurs.

Think about it… position yourself carefully.

Here are my socials: