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When This Happens the U.S. Will Be Just Weeks Away From a Debt Crisis


By Graham Summers, MBA

The
market has rallied aggressively on the belief that a Debt Ceiling deal will be
made. 

Celebrating
a Debt Ceiling deal is like polishing the brass on the Titanic.

The
U.S. has $28.8 trillion in debt. Two years ago, it was just $22.7
trillion. 

The
Trump administration, despite technically being Republican, spent like
socialists, running $1 trillion deficits even when the U.S. economy was
GROWING. 

That
deficit then ballooned up to $3 trillion when the pandemic hit. And now, the
Biden administration is now looking to outdo even President Trump’s spending
spree. 

By
practically all measures, the U.S. economy is in recovery as it reopens. And
yet, the Biden administration is looking to run AT LEAST a $3 trillion deficit
this year… an amount that could potentially rise to $5 trillion or even $6
trillion if President Biden manages to get his infrastructure deal and other
stimulus programs passed.

Meanwhile,
inflation has ignited. 

The
“inflation is transitory” argument has been thoroughly debunked to the degree
that even clueless Fed officials are admitting it. The official inflation
measure (the Consumer Price Index or CPI) claims inflation is 5.3%.

However,
the CPI has been tweaked aggressively to understate inflation over the last 30
years. If we were to measure CPI today the same way it was measured
in 1970, REAL inflation is at 14%.

Yes,
14%.

And
the bond market knows this.

Even
the Fed’s $960 BILLION QE program, which is designed to SUPPRESS bond
yields  is failing. Bonds know inflation is roaring which is
why yields are once again rising rapidly.

When they break that downward trendline, the U.S. will be just weeks away from a crisis. 

The last time the line broke
in 2018, it was because the Fed was raising rates at a pace of FOUR
per year while also shrinking its balance sheet buy $500 billion.

This
time around, the Fed has rates at ZERO and is running $120 billion in QE per
month (a record). Even if the Fed tapers QE by $15 billion soon, it will still
be running over $100 billion or $1.2+ TRILLION in QE per year.

In
simple terms, this time around, when bond yields begin to break out, it will be
when the Fed is already pumping its brains out. 

And
that’s when the End Game begins for the U.S.’s debt situation. 

The
ONLY way the U.S. can continue to service its mountain of debt is if interest
rates remain low. So, if interest rates are rising when the Fed is
already engaged in EMERGENCY levels of intervention, it’s GAME. SET. MATCH.

When
will this happen?

Put another way, when does the next crash hit?

To figure this out, I rely on certain key signals that flash before
every market crash.

I detail them, along with what they’re currently saying about the market today in
a Special Investment Report How to Predict a Crash.

To pick up a free copy, swing by

https://phoenixcapitalmarketing.com/predictcrash.html



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