America's economy is based solely on debt. More and more is diverted to support the debt, the liquidity trap. IMF will step in then and buy all national assets at rock bottom prices. Those stimulus packages seem to be stimulating only the wealthy and the deficit. The official budget deficit is nothing compared to the hundreds of trillions of digital funny money circulating the planet and burying everyone deeper and deeper in debt. Debt will be double the size of the economy by 2051. This sheetshow doesn't have much time left. Debt already is double the size of the economy if the government used accrual basis accounting (GAAP). Unfunded promises for Social Security, Medicare, Government, and Military pensions dwarf the size of the national debt. That train destined for an economic wreck is accelerating into the crash. Carry on at this rate by the end of next year $40T is on the cards; make it $50T if Biden goes on with his spending program. The Debt to Gdp graph stops at 200% of GDP. Once we cross that barrier, we are screwed. No country in the history of man has crossed that line and not defaulted. Once we cross 150% of GDP, it is mighty hard to be prosperous and for the general standard of living to go up. It's a great metric to show the US is terminally ill, and unlike WWII, we have no manufacturing to work your way out of debt, we have no Roosevelt style, activist government to build infrastructures that benefited the country and provide work for people who needed it, (like the WPA, CCC, TVA, etc.), The tax rate on the rich was far greater than what it is today, so the wealth was spread out more evenly, and everyone had an investment in working together and benefiting from it. That was why the standard of living during the period between 1946 to 1970 was the best time for Americans ever in their history. Today, there is no such cohesion in American society, much less tangible accomplishments to show for it. And the American government is stripping its unfunded liabilities (like Social Security, Medicaid, and federal employees' pension plans) to pay its bills and putting nothing back into the kitty. America is on its deathbed, no thanks to the idiots we voted to put in office. Americans really need to get their act together and stop dragging their feet. America is literally running on fumes now. The residual "wealth" of we the people is reaching its end. Many of us have already seen what happens when the tank runs dry. There won't be a reset. There will only be class warfare, soul-crushing poverty, devastated urban regions, and people doing any and everything to survive while our oligarchy overlords watch and laugh. The sad fact is that America is filled with sub 80 IQ cowards. Not a single one of us can change this situation, and there won't ever be a large group of us that use all this firepower we keep laying around because of stupidity and cowardice. If it was going to happen, it would have happened long ago. America, home of the fee and land of the slave. America is a failed state, and the government is the enemy of we the people. They print money to keep their asset prices going ever higher while we fight over the scraps that escape their clutches. We spend all of our time scurrying about to pay off debts and taxes that never end. They need investors to flood the bond market to finance as much of this as possible. Those people will get sucked out of stocks. A big market crash ahead. One that will eclipse 1929. The tree will get shook and every monkey eating fruit since 2010 is going to fall. Even grizzled veterans will be ruined. Those not short, in metals Treasuries or cash will be wiped out. The trigger woll be lockdowns coming back. If they shut the doors again, the market will collapse. And not one damn road, power station, airport, or anything to be had, just a Ponzi pyramid of paper and scrip to the moon. If interest rates so much as blink in a higher direction, the entire American market, and financial go poof! America is dead now, this nation no longer has a functioning government or infrastructure. There is entirely too much poverty and homelessness. We produce nothing save global misery and fiat. The rot from the inside is terminal, and the enemies we have made have long memories and stronger tactical positioning. Hypersonic nukes can be to our door faster than pizza delivery. Now look at the economic and geo-political status of the world. World War 3 will be staring back at us. Welcome back to The Atlantis Report. You are here for your daily dose of the truth, the whole truth, and nothing but the truth. Please take a second to hit the like button, hit the subscribe button, and don't forget to also hit the notification bell. Thank You. The US government ran yet another massive budget deficit in July. The shortfall was particularly larger on a month-on-month basis with tax season ending and the flow of money into the Treasury slowing. The following analysis puts digs deeper into the numbers and puts them into some historical context. The Federal Budget Deficit for July 2021 was 302 Billion which was up 73.4% over June and 16.5% above the TTM average of 238 Billion. The chart shows the Federal Budget for the previous 18 months. To better understand what is driving the large outlays and receipts, the next two charts break down both sides of the budget into different categories. The following table goes deeper into the numbers of each category. The key takeaways from the charts and table: Total. Outlays fell by 10% but Receipts collapsed by 42% as tax season has concluded On a TTM basis, Outlays are 55% above where they were in the period ending Jul 2019 where receipts are only up ~15% Outlays. Health and Human Services continue to burn funds to fight the pandemic. Total spending on TTM basis has been near 1.5 Trillion for the last two TTM periods. This compares to 1.2 Trillion pre-pandemic. Stimulus Checks (Treasury – Other) dropped significantly last month from 80 Billion to 50 Billion. On a TTM basis, it is still very high. While this should fall, it will probably not revert to pre-pandemic levels due to the new child tax credit. Labor Department and SBA are seeing spending fall back to normal levels now that Unemployment benefits are expiring and PPP loans are completed. Debt interest is actually below where it was back in 2019 despite significant growth in total debt. Receipts. Corporate Taxes are up huge compared to the last two TTM periods. The latest period was 333 Billion vs ~215 Billion in the last two periods for a better than 50% increase. Individual Taxes were also up big, increasing from ~1.65 Trillion to nearly 2 Trillion , around an 18% increase. Stimulus checks are taxed, plus incomes have been increasing during the pandemic. The current surge in tax revenue could be attributed to increased stimulus. As the stimulus slows, spending will fall but so will tax receipts. The question going forward is how this dynamic plays out and whether deficits can fall back into a range closer to 1 Trillion dollars (still extremely large by historic standards). With new spending planned and a potentially weaker than expected economy, it is hard to see a scenario where the budget deficit comes into a sustainable range. The chartlooks at expenditures on a TTM basis back to 2016. As can be seen, spending was increasing steadily before the pandemic. Considering the current administration and congress, this trend is not likely to slow. Additionally, politicians are using the last 18 months as evidence that they can spend massive amounts without immediate repercussions. Eventually, the spending will catch up to the economy and budget, and the can can no longer be kicked down the road. Historical Perspective. Zooming out and looking over the history of the budget back to 1980 shows a complete picture and just how extreme the last two years have been. The chart shows the data on a TTM basis to smooth out the lines. While the current extreme period will pass, new spending has been planned, not to mention bills finally coming due (e.g. baby boomer social security payments). This makes it unlikely the federal budget deficit will ever get back below 1 Trillion dollars despite CBO projections for sub 1 Trillion dollars for 2023-2025. While the chart does not paint a pretty picture, it is important to put the entire economy in perspective. Below compares the TTM federal deficit to GDP. The peaks are not solely driven by increases in debt. Usually, recessions (which by definition are two-quarters of falling GDP) are accompanied by increased spending in the form of stimulus. With this context, it makes the lead up to 2020 more concerning. The ratio had started rising in 2015 even though GDP was rising. This indicates deficits were growing at a faster clip than GDP. Even without Covid or the new spending, this trend was set to continue. It is unlikely the US TTM deficit will get back below 5% of GDP without major reductions in government spending. Finally, to compare the calendar year with previous calendar years, the plot shows the Year to Date (YTD) figures for each year through the current month. The government fiscal year technically ends in September, but that is harder to contextualize (e.g. when did Covid start concerning October vs January). Now that all stimulus packages have been enacted, it will be interesting to see if the current year falls further behind 2020 in the coming months. 2021 is on track to also be a record year in terms of revenue. What it means for Gold and Silver. The Budget Deficit matters for gold and silver because it shows how much the US government needs to borrow to make up for the revenue shortfall. More borrowing usually means higher interest rates. As the debt analysis shows, higher interest rates would prove devastating for the federal budget in the medium to long term and also prove devastating on the rest of the economy (corporate debt, mortgage rates, etc.). All of this puts more pressure on the Fed to increase monetary stimulus through both Quantitative Easing and maintaining low-interest rates. This will push inflation higher, devaluing the dollar. Gold and silver offer protection in this environment. We are using Fiat currency, just a piece of paper or digit on a bank ledger that the government declares to be able to buy the production of the general economy. Debt only comes from committing to someone else outside the government to pay principal and interest. When the government simply prints/issues dollars, there is no principle or interest payment due. With that realization, the government can buy up all the currently issued US Treasury debt by offering to do so now or later as the diminishing value of the dollar brings the real value of the financial instrument down to zero. Banks, Insurance companies, and even me would be foolish not to accept such an offer. An alternative would be to bring the interest on all government debt below zero (as has been done in Europe) and then simply offer a 1 for one exchange with currency yielding a similar zero rate of interest. It is all a matter of whether or not the US Government wants the US Dollar to retain its value. The build up of debt simply forces the time when government will have to give up any pretense of the dollar retaining its value. And, we are already there. Debt is already impossible to repay, let alone service except for FED pumping up it balance sheet. This was The Atlantis Report. 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