Flash Dance: Program Trades Ahead

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Last week's shortened 4-day holiday week was murderous, and the week ahead is going to be another CPI/PPI head-banger. With all the rate cut talk, no one seems to be too concerned about the U.S.'s ever-rising debt. The cost of paying the daily interest on the U.S.'s $35.3 trillion debt has soared to $3 billion a day recently, double what it was in 2020, and up $2 trillion from two years ago when the Fed began to raise interest rates. In the process, it made servicing U.S. debt more costly as treasury bonds paid out higher yields. But with the Fed now poised to start cutting rates later this month, the reverse can happen. Cutting interest rates by 1% point and the yield curve declining by 1%-point would lower the $3 billion per day to $2.5 billion per day.

On top of this, the federal government closes out its fiscal year at the end of this month, and the year-to-date cost of paying interest on U.S. debt was already at $1 trillion months ago. Then you throw in the election, and Trump's tax plan would raise the deficit by $5.8 trillion over 10 years, and Harris's plan would increase it by $1.2 trillion over the same period of time. I pulled all the info above out of a story by Fortune magazine, and here is the link.

We all know this is out-of-control spending with no ability to pay it down. Right now, the BRICs consortium to replace the dollar is not working, nor is Russia's move to use the yuan. I don’t know how this is all going to pan out, but I know it's not going to be good. I remember hearing the Fed money printing was not sustainable 16 years ago during the 2008 credit crisis when the debt was $10.3 trillion. In the last four years, the U.S. has racked up more debt than over the last 30 years. UNSUSTAINABLE!!!!