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