저자: PeterSchiff · 외국인
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미국 국가부채 4조 달러 이상으로 금리 상승 시 이자비용이 감당 불가능해져 재정위기가 임박했다고 주장. 10년물 5.25%, 30년물 5.6% 수준에서 금리가 8%까지 오르면 연간 이자 4조 달러 이상으로 재정적자가 6조 달러에 달해 과도한 인플레이션(화폐가치 하락) 또는 디폴트 중 하나가 불가피하다고 진단. 연준이 금리를 올리지도 낮추지도 못하는 함정에 빠졌다고 평가. 달러 기축 지위 약화와 중앙은행의 금 매입 확대를 근거로 금이 달러를 대체할 것이라고 주장.
다듬은 글
Even Janet Yellen, when she was asked about when she was Secretary of Treasury about the debt, she said, "Well, there's nothing to worry about because it's so cheap. The interest is so low. You have to look at what it cost us. The debt doesn't cost very much." Yes, until the rates go up. Then what do you do?
You know, it's like jumping off the top of the Empire State Building and you're like, "Oh, so far so good." But, you know, but you're going to hit the pavement. It's not going to be so good then. And it's inevitable that interest rates will eventually go up. If they rise considerably from here, which I believe they they will or they should, you again you're looking at much bigger interest expenses, which obviously we can't afford to make.
It's So, there's going to be a sovereign debt crisis or a dollar crisis sometime soon because either it's runaway inflation or default. Please like and share the video. Subscribe to the channel and turn on notifications. Are we approaching a financial crisis? Yeah, well, I I think that we probably are.
And I think what's probably more concerning than the current level of rates is where rates are headed from here. Because there's no reason to believe that they're going to stop rising. I mean, right now the 10-year yield is about 5 and a quarter. And the 30-year yield is more like 5.6. But, these are still relatively low yields, especially for a nation that has so much debt because generally the more debt you have, the less creditworthy you become.
And the higher the price you have to pay for lenders to assume the risks of loaning you more money. Um and and people think, "Well, there's no risk to loaning money to the US government." There is. Um one, there's inflation risk because the more debt the US government has, the more likely it is uh to create inflation to deal with it.
And so that erodes away the value not just of your interest payments, but of your principal. But, the probability of an actual default that could, you know, take the form of some type of official restructuring of the debt where the lender is not paid back face value. That is a real probability. Cuz if you look at the numbers, right now you mentioned were the highest the rates have been in like 20 years.
But 20 years ago we didn't have anywhere near this much debt. So, the rates weren't as problematic. But, we went through a 40-year bull market in bonds where rates fell for 40 years. The yield on a 10-year Treasury was 16% in 1981 and it was less than 1% at the low in 2021. So, we've now reversed that trend and we're headed higher.
But, there's no reason for the yields to stop where they are. So, let's assume that yields got to 8% just as a number, which is substantially below uh you know, the 16%. That's half of what they were in in 1981, 8%. Right. And if it took, let's say, another couple of years to get there, and by then our $40 trillion national debt was $50 trillion.
Uh Assuming we had to finance the entire debt at 8%, which is not you know, a big stretch, cuz all the short-term debt keeps maturing and it has to get rolled over. But, 8% of 50 trillion is $4 trillion a year in interest payments. There is no possible way that we can we could do that. Because in order to do that, we would have to borrow the entire 4 trillion.
So, that would you know, that would add um you know, almost 3 trillion to the current national budget deficits, which are close to 3 trillion now. I mean, the official deficits are about 2 trillion, but the national debt is rising by more than 2 and 1/2 trillion a year. So, that that's the real debt.
But, if we're already close to 3 trillion, and we have to borrow another 3 trillion to pay interest on the debt, that would mean our annual budget deficits were 6 trillion. Mhm. Which would exceed 100% of tax collection. The government would be borrowing more money than it collects in taxes. Th- Th- These numbers are just so enormous that there is no realistic way that the government can make these payments.
So, if it doesn't resort to hyperinflation, then a default is the only other alternative. Wow. Uh so, either way there is going to be a crisis here. And I think lenders are going to start to connect these dots, uh if they haven't already begun connecting them, and and just run away from Treasuries, which is going to accelerate the collapse in bond prices and the rise in bond yields, which ultimately bring about one of these two alternatives, which is hyperinflation or default.
The Trump administration opened up a can of worms they never should have opened, and the unintended consequences uh have been a disaster. Yet, what does Donald Trump say? Everything is great. Well, why? Because he says so. He says we're winning the war. Just like he says there was a a a a a ceasefire.
I- I- I- It's all in his imagination. The problem is nobody in his administration is willing to call the president out. So, the president just makes stuff up and everybody else just agrees with him. Uh, you know, it really is a spectacle that I think uh, is going to create a a a dark shadow over the Republican Party, which is very unfortunate because the alternative is socialism.
Not that there aren't a lot of socialists in the Republican Party, including Trump. You know, they are socialists, but they're not as socialistic as the Democrats. But, unfortunately, uh, the democratic socialism is the brand we're going to end up with rather than the Republican socialism because the Republican Party is going to be so discredited uh, by by Trump and the fact that they stood behind him.
You know, just like, you know, the Democrats looked foolish, you know, claiming that that Biden was sharp as a tack when it was obvious that he wasn't, the the Republicans are making the same mistake about about the president about about Trump cuz he's not sharp as a tack either. He's got a few screws loose.
What is the Fed's option right now? Are they trapped and and where do we go from here? Well, first of all, it's not like they they just find themselves, you know, in this trap. They laid the trap. They they created it. They put themselves in this box. I was warning about this for years that they would eventually get to uh, that damned if you do and damned if you don't situation where, you know, they they have to raise rates, but they can't raise rates because if they don't raise rates substantially and shrink the balance sheet, inflation is going to run away.
Uh, but if they do do that, then the entire economy that they built on cheap interest rates is going to collapse because we have all this debt precisely because the Fed kept monetary policy too loose for too long. But, now they can't yank that rug out from under the economy because that's the foundation of the economy.
These high real estate prices are a function of the cheap money. You you you you make mortgage rates normal, well then real estate prices have to normalize, which is a much lower a price. And the whole economy, I mean everybody took on a lot of debt, including the US government. Why do we have $40 trillion in debt?
Because the Fed made it so cheap for the government to accumulate all that debt. Had interest rates been a lot higher, we wouldn't have been able to do it. There would have been pushback a long time ago to cut government spending. But because the Fed enabled the profligacy by suppressing the rates, there was no break.
And in fact, you could go back to listen to even Janet Yellen when she was asked about when she was Secretary of Treasury about the debt. She said, "Well, there's nothing to worry about because it's so cheap. The interest is so low. You have to look at what it cost us. The debt doesn't cost very much." Yes, until the rates go up.
Then what do you do? You know, it's like jumping off the top of the Empire State Building and you're like, "Ah, so far so good." But you know, but you're going to hit the pavement. It's not going to be so good then. And it's inevitable that interest rates will eventually go up. And that's what's happening now.
And that's why interest on the national debt is like 1.3 trillion now or 1.4 trillion. It's already passed defense uh and um Medicare. It's the second largest line item in the federal budget. And by next year, it's going to pass Social Security. It's going to be over 2 trillion in interest. And that's if interest rates stay at 5%.
But if they rise considerably from here, which I believe they they will or they should, you again, you're looking at much bigger interest expenses, which obviously we can't afford to make. It's So, there's going to be a sovereign debt crisis or a dollar crisis sometime soon, because either it's runaway inflation or default.
I think that the dollar has already been losing its dominance. Uh if you look at the dollar as a percentage of total reserves, it's been falling uh for years now. Um uh you know, the the central banks now hold more gold uh than dollars or US Treasuries. Some of that is because of the appreciation of gold, not just because of the acquisition of it.
But central banks continue to divest of dollars and accumulate more gold. So, that trend is there. And I think that is what is going to ultimately supplant the dollar. It's not going to be the euro or the yen or the pound or RMB. It's going to be gold. Foreign central banks are going to hold more gold and fewer dollars and fewer Treasuries.
So, that is going to be a big game changer because you know, now we're going to have to finance our debts domestically, which we can't do because we have such a low amount of domestic savings. And And it means interest rates are going to have to be much, much higher, which again, we can't afford to pay.
Uh so, that That's why we're going to have a crisis. And I think if the Fed ends up monetizing a lot of this debt, so that the government doesn't have to cut spending and doesn't have to default, uh then it's we destroy the value of the dollar. And And that is the method by which we default. So, we don't tell people you're going to get fewer dollars.
Everyone's going to get all the dollars they've been promised. It's just that those dollars are going to buy a lot less. And that goes for everybody, whether you're a Treasury holder, you loan the US government money by buying a Treasury, the money that you get back is going to buy a fraction of what the money would have bought when you originally bought the Treasury.
But, if you're were a government worker uh and you were promised a pension, you're going to get a pension, you're going to get the money, you're just not going to be able to buy very much with it. Same thing if you're getting Social Security. Yes, the government's going to send you your Social Security money, you just not might not be able to buy anything with it or very much of anything.
So, it's not going to make much of a difference in your life that you receive the Social Security check, but you're going to get one anyway, right? That's what's going to happen. Everyone's just going to get paid with money that doesn't buy very much.
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