What the U.S. Debt Ceiling Limit Means for Your Finances

What the U.S. Debt Ceiling Limit Means for Your Finances

By  Brian Martucci  January 23, 2023

The U.S. government is in danger of intentionally defaulting on its debt obligations for the first time in its history.

The Biden Administration and the House of Representatives, which is controlled by Republicans and led by Speaker Kevin McCarthy, must agree to raise the country’s legal borrowing limit — known as the debt limit or debt ceiling — by early June 2023. If they don’t, the government won’t be able to fund its operations, and financial markets will absolutely freak out. That, in turn, could have far-reaching (and very bad) consequences for your personal finances.

What Is the Debt Limit?

First, a quick review of what the debt limit is and the situation we find ourselves in today.

The debt ceiling is the maximum amount the United States government can borrow to fund its obligations. It’s currently $31.381 trillion.

The debt limit is set by law. No one can raise it unilaterally, not even the President of the United States. The only way it can increase is through Congressional authorization. That is, Congress has to pass a law saying “We are raising the debt limit from x dollars to y dollars.”

One common misconception about the debt limit is that raising it automatically puts the federal government deeper into debt by authorizing new spending. Were this true, not raising the debt ceiling would be a great way to control the size of the federal government.

In reality, Congress must raise the debt limit so that the government can pay bills it has already agreed to pay: Social Security checks, Medicare reimbursements, veterans’ healthcare, military service members’ salaries, and on and on. Congress choosing not to raise the debt ceiling is akin to a business owner deciding not to pay her employees or a homeowner telling his mortgage servicer to stuff it.

But because this misconception is so prevalent, it’s tempting for politicians to use the debt ceiling as leverage in negotiations over future government spending. That’s what happened in 2011, when House Republicans successfully used the threat of default to get the Obama Administration to agree to spending controls, and what’s happening again in 2023.

In the summer of 2011, the government came within hours of defaulting before White House and Congressional negotiators finally hammered out and passed an agreement to raise the debt ceiling. The mere threat of default spooked financial markets and chilled demand for U.S. government bonds, sending yields higher.

Since a wide range of consumer and business credit products yoke their interest rates to U.S. bond yields, this temporarily increased rates on mortgages, auto loans, personal loans, and more — hitting consumers and business owners right in the wallet.

Why Does the Debt Limit Exist?

To continue reading, please go to the original article here:

https://www.moneycrashers.com/us-debt-ceiling-limit/?utm_source=apexmoney&utm_medium=dailynewsletter&utm_campaign=i-will-never-recommend-crypto

5 Tips To Help You Safely Pass on Your Wealth

5 Tips To Help You Safely Pass on Your Wealth

Andrew Lisa   Fri, January 27, 2023

It’s hard to imagine that anyone looks forward to planning how their stuff will be divvied up after they die. But taking the time to ensure a smooth transfer of wealth could be your final act of selflessness — and your posterity will certainly be grateful for your efforts.

“Having a well-thought-out plan prepared in writing by an estate planning attorney is essential,” said estate planning and wealth transfer attorney Robert E. Kabacy of Kell, Alterman & Runstein, L.L.P. “Without a plan, even though statutes define how an estate is handled, heirs are sometimes left with questions.”

Questions are just the start of what can go wrong if you neglect to make arrangements.

A poorly planned transfer of wealth can saddle your beneficiaries with high fees, unnecessary tax obligations and, worst of all, foster infighting, resentment and prolonged legal battles among your heirs.

The good news is that a little bit of planning can prevent all of those unfortunate outcomes and enshrine your legacy for generations to come.

If Nothing Else, Write a Will

The most basic tool in the wealth-transfer process is a will, which provides a record of your wishes. Without one, the state — and your heirs — are left guessing.

“A will is used to designate how you want your assets distributed to your surviving loved ones upon your death,” said estate planning attorney Tim Hurban of Hurban Law. “If you die without a will, state law governs how your assets are distributed, which may or may not be in line with your wishes.”

Create a Written Inventory of Your Assets

Every will is only as good as the chronicling of assets that goes with it.

“The single most important thing you can do to insure that your wealth is passed onto your loved ones is to keep an inventory of your assets somewhere,” said Tim Hewson, CEO and co-founder of U.S. Legal Wills. “In your will, you typically refer to ‘my estate,’ and it is the responsibility of your executor to gather up that estate and distribute it to your beneficiaries according to the instructions in the will.”

The problem, according to Hewson, is that executors often have no idea what or where your assets are. That’s why it’s crucial to create a detailed record that includes the information, account numbers, logons and passwords needed to access them.

“A generation ago, our parents may have had two bank accounts and a monthly statement sent to them in the mail,” Hewson said. “Today our assets are distributed all over the place, including in online accounts.”

 To continue reading, please go to the original article here:

https://news.yahoo.com/pass-wealth-according-experts-120011191.html

Inflation Hedge Your Life: 5 Easy Ways to Live Richer

Inflation Hedge Your Life: 5 Easy Ways to Live Richer

By Financial Imaginer

Inflation is at an all-time high. The rising prices of goods and services are making it increasingly difficult for people to live comfortably. However, there are ways that you can inflation hedge your life and potentially live even richer without having to make significant changes. In this blog post, we will discuss some creative ways that you can protect yourself from the effects of inflation.

There are endless possibilities when it comes to inflation hedging your life.

Some of them are surprisingly simple and easy to implement.

Let’s get started!

1. Rethink Your Habits and Lifestyle

When it comes to inflation, you have to be mindful of every penny that you spend. What are you spending it on? Is it for a solution, for solving a problem, for a brand? One way to do this is to rethink your current habits and lifestyle. Are there any expenses that you can reduce or eliminate? Can you find cheaper substitutes for the things you need without reducing your quality of life?

Chances are most readers can do a lot on this first point!

A lot of people suffer from what is called lifestyle inflation. This occurs when your spending rises along with your income. You may not even realize it, but as you get raises and promotions, your lifestyle slowly starts to creep up. Suddenly, you’re spending more on coffee, going out to eat more often, and buying nicer clothes. All of these expenses can add up, and before you know it, your lifestyle inflation becomes inflationary itself!

The more you give in to lifestyle inflation.

The more you’re robbing your future self.

Of course, this is not to say that you should never enjoy the fruits of your labor. But it is important to be mindful of your spending and make sure that your lifestyle doesn’t become too inflated.

If you are looking for ways to reduce your spending, here are a few ideas:

– Find free or cheap entertainment options in your city or town.

– Replace sparkling bottled water with a Sodastream machine.

– Start cutting your own hair instead of paying for haircuts.

– Make coffee at home instead of buying it every day.

– Bring lunch from home instead of eating out.

– Shop at thrift stores or consignment shops.

– Grow your own veggies in a garden.

– Bake your own bread.

In a nutshell, the golden rule here is: Never upgrade your lifestyle too fast!

If you’ve gone beyond that point, think again, reconsider, and reevaluate.

There are many other ways that you can cut down on your spending.

The key is to be creative and to find what works best for you!

2. Separate Your Wants from your Needs

Every person’s life is different, so there is no one size fits all solution. However, by being mindful of your spending and separating your wants from your needs, you can make a significant impact on your budget.

To continue reading, please go to the original article here:

https://www.financial-imagineer.com/inflation-hedge-your-life/

The Secret to Becoming a Money Jedi and Unlocking Financial Independence

The Secret to Becoming a Money Jedi and Unlocking Financial Independence

May the Life Force be with You!

2. January 2023  Financial Imaginer

Do you want to be a Money Jedi? Of course you do! Who wouldn’t want to have the power to control their finances and achieve financial independence? In this blog post, we will discuss the secret to becoming a Money Jedi and unlocking your true financial potential. It all comes down to harnessing the life force!   Your focus determines your reality.  Qui-Gon Jinn

Ok, enough small talk, let’s dive right into it!

A long time ago in a Galaxy far, far away stories were told about a group of people who managed to control their life force…

The Life Force

The life force is the “secret ingredient” to unlocking financial freedom. It’s an intangible energy that can be found in all things, including and especially in money.

In a way, money is your “lifetime” converted into some intangible and powerful thing at your disposal. Isn’t money some sort of “time pill”, compressed and ready to use whenever you need it?

If you are serious about becoming a money Jedi, you need to start recognizing the life force in anything around you!

Feel it.

It’s everywhere.

This isn’t just a lame portfolio of boring stocks, this is your freedom dividend fund.

This isn’t a Lamborghini, it’s half a lifetime of freedom being depreciated on the road.

This isn’t a relaxing five-star resort holiday, it’s one year less of work closer to retirement.

This isn’t a nice McMansion with 3,000 sqft, it’s two decades of unpleasant extra work – or if you rent it out it’s your fortress of freedom!

You see, young Padawan, one got to gain complete control over your life force!

You got to learn how to control and make use of it.

Do or do not. There is no try.   Master Yoda

By harnessing this power, you can gain complete control over your money and use it for your highest good: Time!

Becoming a Money Jedi requires dedication and practice but with the right guidance, anyone can do it!

Financial Independence is just 2 Parsecs Away!

 To continue reading, please go to the original article here:

https://www.financial-imagineer.com/becoming-a-money-jedi/

The Worst Assets To Inherit and How To Address Them Before It’s Too Late

The Worst Assets To Inherit and How To Address Them Before It’s Too Late

David Nadelle   Thu, January 26,

The sudden and lengthy appearance of the coronavirus pandemic delivered many lessons — among them, that life can be taken away from even the healthiest individuals in the blink of an eye. Planning appropriate asset allocation before you die is an absolutely necessity for every adult.

Having a legally binding will in place lets you decide who will inherit your financial assets and possessions when you pass away. However, if you die without a will, the state in which you lived will make these very important decisions for you.

Financial assets are usually more straightforward, but as AARP noted, “Even IRAs and 401(k)s can be problematic, since they aren’t easy to transfer to the next generation or your children hold on to them for sentimental value.” Cash may be the best asset to leave behind, according to some experts.

You always want to do right by the deceased, but sometimes receiving another’s possessions when they pass can be more of an inconvenience than good fortune. Here are five of the worst assets to inherit and how to address them before it’s too late.

Businesses

While it is a reasonable and kind act to pass on your hard-earned business to your children, not every child wants to “take over the family business.” A business requires a succession plan so there are no unresolved expectations and operating details. Barring passing it over to a family member, business owners will need to arrange a buy-out by any existing partners — or a sale to a prospective buyer — while they are still living and working.

Timeshares

The one good thing about inheriting a timeshare is that it is already (partially) paid for. However, inheriting a timeshare means taking over a shared vacation resort, condo or property that won’t increase in value, that comes with annual fees and maintenance costs — and that includes strict regulations and flexibility concerns. Timeshares are often more of a headache than a relaxing adventure away from home, so those who are considering passing them down to another should find out first if the timeshare is even wanted and if not, make arrangements to disclaim it.

To continue reading, please go to the original article here:

https://www.yahoo.com/finance/news/worst-assets-inherit-address-them-182019998.html

9 Principles & Strategies to Becoming a Millionaire (in 2023)

9 Principles & Strategies to Becoming a Millionaire (in 2023)

By Psychologist & Writer Dr. Benjamin Hardy

It’s not how good you are but how good you want to be - You have to want it!

We all become the product of our desires  - If you don’t want to become successful – you won’t – We all have  stories and values in our mind – and a lot of people think that wealth or success is bad -  this is not true  - There has to be a “why” behind it -

https://www.youtube.com/watch?v=pmIhDENqbfc

Psychologist Dr. Benjamin Hardy Explains: Money Habits Keeping You Poor

https://www.youtube.com/watch?v=m2NChuS4dSo

This Video Will Teach You More Than Reading 100 Books | Dr. Benjamin Hardy

https://www.youtube.com/watch?v=oUK6x5S0RUk

Don’t Hide Your Emergency Cash in These Spots

Don’t Hide Your Emergency Cash in These Spots

Cynthia Measom   January 23, 2023

To keep from having to go into debt when the unexpected happens, financial experts recommend that you open a savings account and build an emergency fund that can cover three to six months' worth of expenses. While that's all well and good, sometimes you need to have cash within arm's reach.

"It is smart to have a stash of money on hand in case of natural disasters or major power outages when electronic money transfers may not be possible," said Andrew Latham, certified financial planner and content director for SuperMoney. "However, the lion's share of your emergency savings should be in an FDIC-insured savings account earning interest."

If you're hiding emergency cash at home, here are some spots you should avoid.

Buried in Your Yard

"If you want to keep your cash accessible but not in a bank account, you might get tempted to put it in a coffee can or plastic bag and bury it in your yard," said Laura Adams, MBA and personal finance expert with Finder. "That might be the worst place for cash because it could get destroyed, forgotten or stolen. Even if you have home or renters insurance, it never covers lost, damaged or stolen cash."

In a Safe That Isn't Waterproof or Fireproof

"If you want cash on hand, ensure it's in a waterproof and fireproof safe or locked cabinet," Adams said. "Make sure you don't keep all your emergency money at home because a natural disaster such as a fire, flood or windstorm could put you at risk of losing all of it."

Under a Loose Floorboard or Behind a Loose Brick

 To continue reading, please go to the original article here:

https://finance.yahoo.com/news/don-t-hide-emergency-cash-200301493.html

5 Major Money Mistakes To Avoid When You’re Nearing Retirement

5 Major Money Mistakes To Avoid When You’re Nearing Retirement

Jan 24, 2023  By Jennifer Taylor

You’ve been working hard your entire adult life and you’re finally nearing retirement. The prospect of having more time to relax and enjoy yourself is exciting, but you’ll need money to do that.

As you wrap up your peak earning years and prepare to step away from the workforce, it’s important to make smart money moves that will protect your nest egg. All it takes is one poor financial choice to throw a wrench in your plans — and financial stability — so take the time to make informed decisions.

When faced with a large amount of cash, it can be tempting to share it with loved ones — i.e., your children — or indulge yourself with luxury items. However, this money needs to last your entire retirement, which could span decades. Here’s a look at common financial blunders you don’t want to make as you get older if you want to avoid a major financial setback.

Building Wealth

Collecting Social Security Benefits Too Soon

Many people make the mistake of taking Social Security income as soon as they can because it’s available. Others start early because they’re afraid the system will run out of money. Neither approach is the best way to maximize benefits.

“You receive more each month if you wait until your full retirement age, and you can even get increases after that — amounting to roughly 8% per year until you’re 70,” said Justin Pritchard, CFP, founder of Approch Financial, Inc. in Montrose, Colorado.

Having patience can literally pay off.

“Instead of claiming as soon as possible, run some numbers to determine how much you’ll earn if you wait,” he said. “Remember that a surviving spouse who takes over your benefit will be affected by your decision, so choose carefully.”

Cashing Out a Retirement Account

To continue reading, please go to the original article here:

https://www.gobankingrates.com/money/financial-planning/major-money-mistakes-avoid-turn-60/

They Finally Figured Out How To Lower Inflation!

They Finally Figured Out How To Lower Inflation!

By Simon Black January 24, 2023

We all know that inflation has been well above the Federal Reserve’s target rate of 2% for nearly two years now.  It peaked at over 9% last June and has remained stubbornly high since then.  But it seems like the bureaucrats have finally found a way to reduce inflation.

No, it has nothing to do with reducing regulations, cutting taxes, and re-embracing capitalism.  The bold solution that our courageous policymakers have come up with is to change the way inflation is calculated.

So rather than actually stop the destructive things they’re doing that are actually causing inflation, they’re simply inventing a new way of calculating it. It’s genius!!

The US Bureau of Labor Statistics (BLS) announced that, beginning this month, they will calculate the Consumer Price Index (the CPI, which is one of the key benchmarks of inflation) in a different manner.

But they’ve actually provided very little information about how they’re going to do that (and nothing builds confidence more than a total lack of transparency).

One small detail that we do know is that they’re only going to use one year of consumer expenses to calculate long-term average price weights.

But they don’t give us any more information than that.

For example, will they use average or median consumer expenditures for the year? Will they weigh the first three months of the year, which had low inflation, higher than the final nine months of 2021?

Without more information, we can’t know exactly how the changes will affect inflation numbers.

But it’s a safe bet that they’ll choose weights which make inflation appear lower on paper.

This tactic of “moving the goalposts” to achieve the outcome they are looking for is becoming something of a trend...

Last year, the United States experienced two consecutive quarters in which the economy shrunk.

This has long been the standard criteria to define a recession in practically every corner on earth.

But the White House conveniently argued in July 2022 that this method is “neither the official definition nor the way economists evaluate the state of the business cycle.”

Instead, the US government says that the “designation of a recession is the province of a committee of experts...”

Perfect! Who needs clear, unchanging definitions of words when we have experts to make up new standards on the fly? And when have the experts ever been wrong before?

They also did this during the pandemic, when Lord Protector Fauci refused to define what ‘herd immunity’ meant, or give any specific measure that would tell us we could take off the masks.

But when it comes to inflation, we don’t need the “experts” to tell us that it is driving up costs. We all know this when we go to the grocery store, look at home listings, and fill up the gas tank or oil burner.

And we’ve discussed the reasons for this on many occasions.

There are extremely inflationary forces at work that didn’t exist for decades.

For example, the world has been in a state of relative peace for quite some time. For decades there were no major wars, and most countries were happy to trade and get along.

But that’s no longer the case. We’re involved in a proxy war in Ukraine, and China has ramped up its divisive rhetoric.

Conflict is inflationary. Conflict makes it harder to trade among nations. It means countries become insular and impose sanctions and tariffs instead of opening up for business.

You don’t need a PhD in economics to understand that will lead to higher costs.

Another factor is that, for a long time, the manufacture of American consumer goods such as clothes and electronics trended cheaper, creating higher profit margins. And that savings was passed on to consumers.

But those days are done.

Slowly, as China’s economy grew, it was no longer so cheap to offshore manufacturing there. So the US moved to Indonesia, then Vietnam, and now Bangladesh... each of which saw its own economic growth.

Now there’s nowhere left to turn to make cheap stuff. Instead, there is an on-shoring movement to bring manufacturing back to the United States and Europe. That is obviously going to be inflationary.

Energy prices are another huge driver of inflation. History is clear that it is not just about cheap prices, but the return on energy invested. The more energy it takes to produce more energy— whether that’s hydrocarbons, solar, or whatever— the less return there is on energy invested.

And like reduced profits, that means there is less energy leftover to grow.

But not only are we having to drill deeper and explore harder to find new sources of energy. The investment to do so has been choked out by governments and environmental fanatics who demonize the entire industry.

And with all these headwinds, the US government is still borrowing well over $1 trillion a year to fund its deficit spending.

So despite the celebration over a couple months of inflation trending downwards, it is disingenuous for the “experts” to claim that inflation is falling, and the worst is behind us.

In mid-2021, at the beginning of this inflationary period, I wrote that inflation is not a passing fad that’s here one day and gone the next. It is a long-term phenomenon. Some months it will be higher, some months it will be lower. Some years it will be higher, some years it will be lower.

But over the long-term, inflation will continue driving prices higher, and making people less prosperous.

I’m not saying there will be hyperinflation. But the unprecedented last couple of decades of sub-2% inflation are likely gone.

At this point, if inflation drops to, say, 4.5% we will likely see victory celebrations from the Fed and US government.

But regardless, it makes it pretty hard to trust their numbers when they just go and change the way it’s calculated.

And that is why the official inflation numbers should have little bearing on the decisions you make.

You are far more equipped than a room full of experts to figure out how big a problem inflation is to you. Just walk down the aisles at your local store.

And if you determine that inflation is a problem, consider taking refuge in real assets.

Throughout history whenever inflation hits, it’s almost invariably been a good idea to have direct ownership of an asset that cannot be conjured out of thin air by a central bank.

Real assets include things like productive land, shares of a well-managed private business, or physical gold and silver.

Most people don’t have an easy opportunity to buy productive land or shares of a well-managed private business.

But gold and silver are totally within reach.

Yet despite the highest inflation in decades last year, gold was pretty flat.

Now it is starting to tick up, but is still about $150 dollars off its all time high of around $2,060 per ounce in 2020.

And silver costs less than half the price of its all time high of around $50.

But the reason to buy precious metals is not price speculation.

Short term, there are many different factors that drive the price, and it does not align perfectly with inflation. But it is driven by supply— which is relatively constrained— and demand— which is largely driven by central banks buying boatloads of gold, not retail investors buying coins.

Gold isn’t going to shoot to the moon like meme stocks or DogeCoin.

But long term, gold has been the best protection against inflation throughout history.

To your freedom,  Simon Black, Founder   Sovereign Research & Advisory

https://www.sovereignman.com/trends/they-finally-figured-out-how-to-lower-inflation-145346/

The Future of Banking: When Will We No Longer Need Cash?

The Future of Banking: When Will We No Longer Need Cash?

Andrew Lisa   Tue, January 24, 2023

In 1950, Americans could pay for dinner at a restaurant even if they left their money at home for the first time in history. That was the year Diners Club introduced the world’s first credit card.

More than 70 years later, the cashless society that’s been promised since then still hasn’t materialized. Despite direct deposit, BNPL, Apple Pay, Venmo, cryptocurrency and the rest, green paper rectangles with pictures of dead presidents still have a home in our wallets.’

If mobile banking apps and blockchains didn’t bring death to the dollar, is the long-awaited cashless society a myth, or is the generation coming of age today the last that will ever see paper money outside of a museum?

The Writing Is on the Wall for the Good Old Greenback

According to The New York Times, central banks across the world are experimenting with digital versions of their money — kind of like Bitcoin, but issued by the state and controlled as a currency. Sweden, China, Japan and others are introducing these digital currencies alongside old-fashioned cash. The plan in large would be to phase out paper money gradually over time.

According to the Atlantic Council, the U.S. Federal Reserve recently began working on a bank-to-bank digital currency of its own designed to speed up transfers between the world’s financial institutions. Unlike the previously mentioned countries, America’s central bank digital currency (CBDC) is only for wholesale transactions and isn’t yet a consumer currency — “yet” being the key word.

 To continue reading, please go to the original article here:

https://finance.yahoo.com/news/future-banking-no-longer-cash-120025072.html

What Does This Look Like 10 Years From Now?

What Does This Look Like 10 Years From Now?

Simon Black   January 23, 2023

On March 2, 1629, after years of escalating tensions with his own government, King Charles I of England dissolved parliament and ordered all the politicians to go home.

He was only in the fourth year of his reign, but Charles was already a very unpopular king. One of his worst habits was frequently abusing his power and taking unilateral executive actions-- raising taxes or passing new regulations-- which would ordinarily require the approval of parliament.

But Charles hated going through parliament, and he routinely found ways to bypass them; often he would creatively interpret obscure passages of ancient laws as justification to do whatever he wanted.

In one instance, Charles decided that a 400+ year old law, which had first been decreed under Henry III in the early 1200s, gave him the authority to demand payment from everyone in the country making more than 40 pounds per year. It did not.

In another example, he claimed that ‘tradition’ entitled him to collect customs and duties on various imports, even though English law clearly required parliamentary approval on all imposts.

Charles also famously demanded money from wealthy merchants and banks, calling them “forced loans”. He even seized literally TONS of silver from the Royal Mint that was being stored on behalf of wealthy individuals and foreign governments.

Parliament made attempts to block Charles; when he asked for money to raise an army and go fight in the Thirty Years War (which had been raging in Europe since 1618), parliament refused. When he wanted funds to bail out a close relative in Denmark, parliament again refused him.

Sometimes their disputes even spilled into the courts, where judges had to determine the legality of the king’s taxes and regulations.

But nothing was ever settled, and no compromises reached. In fact the conflict continued to escalate, until Charles finally dissolved parliament in 1629… effectively shutting down the government.

This is an often-repeated story throughout 5,000+ years of human history; there have been countless examples of dysfunctional governments and terrible leadership that fail to reach a rational compromise over the nation’s finances.

And such examples tend to be a hallmark of a nation in decline.

In the case of Charles, he would go on to be arrested, tried, and executed, and England plunged into a civil war.

Louis XV of France, and his successor Louis XVI, also routinely fought with their parliaments over royal finances. France would soon go bankrupt and dive head-first into revolution.

These are lessons worth noting, given that the United States government is once again at the precipice of default.

The national debt now stands at nearly $31.5 trillion. This is the current statutory ‘debt ceiling’, meaning that the Treasury Department no longer has the legal authority to borrow more money.

This means that yet another government shutdown is potentially on the table, as is a default on the national debt.

If this story sounds familiar it’s because this has already happened in recent history-- in 2011. And 2013. And 2018. And 2019.

Now it’s happening again. And unsurprisingly, both sides have dug in and claim they are unwilling to negotiate their demands.

To say this is yet another humiliation for the United States is a massive understatement. The entire world can see that, not only is the US government incapable of managing its finances… but also that its politicians cannot rationally solve problems. It’s pitiful.

What I really want to focus on today, however, is the future: what do you think this problem will look like 10 years from now?

Today it’s already a terrible embarrassment… and a major problem.

The national debt is so big that, this fiscal year, the Treasury Department will spend close to $1 TRILLION just to pay INTEREST.

This is happening at a time when:

1) Interest rates are rising (which means that the government’s annual interest bill will increase)

2) The economy is slowing (so tax revenues will decrease)

3) Government spending is still outrageous, with a $1+ trillion deficit expected this fiscal year

This is a pretty disastrous scenario. And if you plot this trend line starting from where we are today, it’s easy to imagine what might happen over the next decade.

If deficits are already $1 trillion per year right now, how high will they be in a decade? If the national debt is $31.5 trillion today-- roughly 120% of US GDP-- how high will it be a decade from now?

It’s silly to assume that the United States can simply keep growing the national debt forever without consequence. It’s silly to assume they can run trillion dollar deficits every year without consequence.

Today those consequences are just embarrassments and minor inconveniences. Ten years from now they may be major catastrophes.

This is the entire point of having a Plan B. The future is far from certain-- and it’s possible that voters finally elect competent leadership who act responsibly and arrest the nation’s decline.

And that’s a nice hope, and it would be great if it happens.

But it’s a lot more rational to focus your energy on things that you can control. And that’s a Plan B.

If your government is on a clear path to more humiliation and fiscal ruin, it makes sense to ensure you don’t have all of your eggs in one basket.

To your freedom,

Simon Black, Founder  Sovereign Research & Advisory

https://www.sovereignman.com/trends/what-does-this-look-like-10-years-from-now-145298/