The New CS Board

[jumanji0881]

Debt Alarm Ringing : http://www.mauldineconomics.com/frontlinethoughts/debt-alarm-ringing

My comment: I do not think Mauldin is a very good analyst, but he does how some things that are worth reading. I don not understand some of his comments which seem contradictory, such as the following statement just after he has argued that US rates will rise due to huge deficits :

Now, buyers will appear at the right price, i.e. some higher interest rate. Barring recession-induced lower rates (which would be a different problem), government borrowing could get way more expensive.

My comment: But deficits will explode higher in a recession which would imply higher rates.

Other excerpts:
I am trying to imagine a scenario in which this ends in something less than chaos and crisis. The best I can conceive is a decade-long (and possibly more) stagnation while the debt gets liquidated. But realistically, that won’t happen because debtors won’t let it, and they outnumber lenders. Hence, something like the Great Reset will happen first.

Even though you are reading about a budget deficit of under $800 billion this year, the actual amount of debt added last year was well over $1 trillion. That is due to “off budget” items that Congress, in its wisdom, thinks shouldn’t be part of the normal budgetary process. It includes things like Social Security and Medicare—which vary from time to time and year to year—and can be anywhere from $200 billion to almost $500 billion.

My comment: The deficits also do not include the amount the Treasury borrows from Trust Funds such as Social Security, Highways, etc to offset the deficit. These funds are never paid back, as Bush said the SS Trust fund just has a bunch of IOUs (in the form of Treasury Bonds)