Ken Griffin says America was sent a warning from the bond market. It’s time to fix the national debt.

Photo above - if your next Monopoly game looks like this, don't blame me. I've been warning about the national debt forever . . .

Davos, Switzerland – it turns out this week's forum of world leaders is NOT all about the invasion of Greenland. Some economic stuff was discussed too, although you’d never know it from watching cable news.

While everyone is transfixed over ICE shootings and whatever we need Greenland for, US treasury bonds are becoming a “disfavored investment”. Because of our $39 trillion national debt. America is going deeper into debt at the rate of about $100,000 a second.

This concern – by banks and foreign governments which used to consider US treasuries the safest thing on earth – expresses itself by nobody wanting to buy US Treasuries at face value. Buyers insist on a discount. Because they believe there is a growing chance America won’t be able to redeem those bonds when they come due.

What happens when America defaults on its US Treasury bonds? “F*ck around, and find out”.

It might mean that future inflation will make whatever we had up til now look like a walk in the park. How’d you like to pay the same gasoline prices as Europe and Japan? To have more than half of every tax dollar you send to the IRS be sucked up immediately just to cover interest on the national debt? Interest on stuff congress bought years – sometimes decades – ago, and which we no longer need or use or even remember. America has even stopped investigating the trillions in Pandemic stimulus fraud. Wouldn't you rather see those supercar driving rappers in a detention camp instead of the guys mowing our lawns?

$100,000 a second. It kind of takes your breath away. And your chance of owning a home. When treasury yields reach 5%, banks have to charge more for mortgages. Because depositor money flees to something better. So banks then raise their CD and savings account rates. Which looks great if you’re a retiree hoarding a $1,000 certificate of deposit. But not so great if it means millennials pay $200 or $500 a month more on their mortgages.

I don’t expect China (and BRICS) to achieve their fantasy of replacing the US dollar with their hilarious 14 cent yuan. I don’t expect everyone to pile into Bitcoin in wide eyed fear, but you can’t rule it out. The bitcoin bros keep crowing that electrons spinning around inside a mysterious black box are safer than gold. But they can’t explain how bitcoin regularly loses 25% of it’s value in a week or two. Might be something to do with being thinly traded by “whales” whose main goal is evading taxes?

I honestly don’t know what comes next. But nothing good can come from spending $100,000 a second in interest on stuff we completely lost track of. If an octogenarian widow living next door ran her finances like this, they'd have her committed for senile dementia.

I’m just sayin’ . . .

Ken Griffin says America was sent an ‘explicit warning’ from the bond market, and it’s time to get the national debt in order

https://finance.yahoo.com/news/ken-griffin-says-america-sent-113855541.html

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PicturesOfABetterTomorrow · 41-45, M

At this point this is re-arranging the deck chairs on the Titanic.

A good chunk of the world is done with the US and the dollar as the reserve currency is rapidly coming to a close. 39 trillion in debt based on the assumption the empire will never fall is not something that can be solved in the likely timeline the US is looking at being hit with.

This along with massive investment banks like Deutchebank determining that the US economy as a whole is only being held together right now by a massive AI bubble of hype doesn't help.

And it is not just bonds people don't trust. The world at large is starting to wake up to the fact that they cannot trust Americans for even basic trade deals.

Even if Trump gets voted out people have realized there is zero incentive to trust another GOP clown won't be elected in 4 or 8 years and sets the world on fire all over again.

Most of us are done.

I mean you will still have a few simps in Europe in the EU and NATO that would burn their own countries to the ground for daddy Trump because they are so submissive as former powers or power drunk like an ex Estonian minster who thinks she runs an empire now. But even they won't be around long. Many of these simps in Europe are competing with Trump for the worst approval ratings in the world.

SusanInFlorida · 31-35, F

@PicturesOfABetterTomorrow i'm a NATO fan.

that said, europe needs to stop whining about the decline of america while the shelter under a NATO defense umbrella which is mostly paid for by US taxpayers.

Let Europe shoulder a proportionate NATO cost based on their population share of NATO. And let them get caught up on unpaid back dues.

And let them drive the bus on things like Ukraine.

PicturesOfABetterTomorrow · 41-45, M

@SusanInFlorida More like Americans whining that you are expecting others to finance your empire.

And that will never happen.

Ukraine literally has more deserters than the combined armies of the UK, France, and Germany.

And the only ones eager to fight your wars for you have no ability to do so.

Then again neither can the US.

Russia has proven NATO is a paper tiger incapable of winning any conflict.

SunshineGirl · 36-40, F

Of greater threat to bond markets than accumulated debt are politicians who make up economic policy on the hoof, including popular but essentially unfunded tax cuts. Government borrowing rates, like mortgage rates, were practically zero for more than a generation. Unfortunately many governments mindlessly pursued austerity politics instead of investing in infrastructure that would have stimulated growth and benefited society as a whole.

Populists spook the bond markets with their disdain for economic orthodoxy. Here in the UK we are still paying an "idiot's premium" on PM Truss's fantasy budget of September 2022.

SusanInFlorida · 31-35, F

@SunshineGirl i would be overjoyed if every spending appropriation, tax increase, and tax cut had to be approved by a congressional supermajority of 66%.

enough of this BS where the senate can commit us to spending trillions on a vote of 50-49.

jackjjackson · M

You’re in the UK. Explains a lot. @SunshineGirl

Khenpal1 · M

$100,000 now or $1,000,000 in ten years. Actually its 115 per second now.
Both USA and China has massive debt , Russia burned 12 trillions on war.
By the way , here’s the MERE real story the US is involved in almost every single war on Earth.

SusanInFlorida · 31-35, F

@Khenpal1 I'm watching the old TV show "perry mason" as I write this. evidently could by a cadillac convertible for $4,000 or so in those days. Ah . . .inflation.

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SusanInFlorida · 31-35, F

@jshm2 agreed. but at least in the 1950s, when America ruled the post WW2 industrial marketplace, america could build enough cars, washing machines, refrigerators, airliners, televisions etc to mostly outrun the balance of trade problem.

Khenpal1 · M

It s going to be gradual sell and f off dollar , l guess over 10 years period similar to what China did.

jehova · 36-40, M

Best practice stop spending bring production home withdraw as the world currency. Scale back and spend less. I guess these octogenarians were never taught budgeting in k12?! Wow $100k a second!

SusanInFlorida · 31-35, F

@jehova i'm 100% in favor of bringing production home. But new factories cannot be built overnight. putting high tariffs on stuff we can't make for ourselves is just asking for misery.

let's concentrate on the important stuff first:

1 - advanced chips
2 - solutions to todays crappy, fire prone lithium batteries
3 - solar panels and wind turbines
4 - hack resistant internet and data security components

jehova · 36-40, M

@SusanInFlorida I agree to that I personally believe the basics first though food water shelter so agriculture water management and housing then the rest but yes as you mentioned those are great places to start domestic production of
Still spend less earn more halt space exploration build self reliance including satellite networks and infrastructure

exchrist · 36-40

The bond market is about to flip for America and DJT is accelerating our demise. The entire world sees the writing on the wall and is dumping their investments with any ties to America as it loses standing.

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SusanInFlorida · 31-35, F

@exchrist nobody accepts bitcoin because the value can fluctuate 2-5% on a daily basis. who wants to sell a house or a car with that level of risk?

there are 500,000 crypto currencies in existence. 10,000 active today. A friend of mine just created a new one. The "Greenland" coin. It has a polar bear on it. people are actually buyiing it. he cannot explain how he ended up first in line to make such a crypto.

exchrist · 36-40

@SusanInFlorida that precisely my point it’s too novel too volatile too unstable.
Personally electronic crypto seems like a pyramid scheme to avoid taxation to me. America’s got bills and billionaires (musk) are trying to avoid the taxes that need to be paid in order to settle the nations debts.

SusanInFlorida · 31-35, F

@exchrist i am continually flamed (in reddit) whenever i pose leading questions like "why do hackers and kidnappers only accept bitcoin in payment?"

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