Editor’s Note: The editorial below by Daniel Lacalle from The Epoch Times concisely explains why global debt is an existential threat. Unwittingly, he also makes the case for why central banks are buying up so much gold. It’s important for readers to know this was written as an editorial and not as a “sponsored” post; the truth is the best way to highlight why Americans should strongly consider moving wealth or retirement to physical precious metals as soon as possible. Here are the America First companies we recommend for this.
It should also be noted that massive national and global debt is why I am so adamantly opposed to Kevin McCarthy’s debt ceiling deal. It suspends the debt ceiling until 2025. It’s so bad I’m not certain default would have been worse. With that said, here’s Lacalle’s article…
Global debt levels soared by $8.3 trillion in the first quarter of 2023, climbing to $305 trillion, nearly the record high set in the first quarter of 2022, according to the Institute of International Finance. This means almost 335 percent of GDP.
Rising debt is a burden on growth, and soaring public debt means higher taxes, weaker productivity, and declining real wages as governments push inflationary policies to try to dissolve part of their enormous indebtedness.
Public debt is not a reserve asset for the public sector; it is a negative factor that crowds out investment and credit and erodes purchasing power from families and earnings from businesses as taxes rise. To make public debt a reserve asset, it would have to generate real economic return, just as is the debt of private businesses used for solid investments. However, governments use increasing debt for current spending with no real economic return, and this leads to lower growth trends and loss of purchasing power of its issued currency.
Private debt is paid by families and businesses, but public debt is also paid by the private productive sector. Therefore, the impact on the pattern of growth, job creation, and investment are significantly more negative when public debt rises.
There is no such thing as public debt. It is paid by you, always, with higher taxes, higher inflation, or larger budget cuts—maybe all at the same time.
Global markets have entered a perverse incentive mechanism whereby consensus investors favour rising public imbalances, expecting central banks to implement quantitative easing afterward. The main reason is that market participants perceive that it will benefit equity and bond valuations in relative terms. However, this is a dangerous bet. Those investors that hail public debt and quantitative easing continue to bet on an outcome that has not happened for years: low inflation and decent growth added to equity multiple expansion. Those market participants seem to want another fix of money printing, expecting 2009 to return. It is even worse, however. Demanding currency debasement and destruction of the middle class for a small expansion of multiples directly attacks those that invest for the long term.
Rising debt means gold remains as the only de-correlated and safe asset in an environment where currency destruction is likely to continue. Bitcoin and crypto assets are a different thing; in fact, they are highly correlated with nonprofitable tech.
Governments are not going to reduce deficit spending, and this means that public fixed income may be the riskiest asset for investors in an era of inflationism.
Investors can bet on one thing: The inflationist policies that have been modestly implemented since 2009 are going to be accelerated. This will not be pretty if it leads to a prolonged period of stagflation. Stagflation does not create multiple expansion and equity booms. It is bad for fixed income and equity markets.
You wanted high debt, more spending, and more central bank easing? This is the consequence: record debt, weaker growth, and inflation.
Article cross-posted from our premium news partners at The Epoch Times.
Independent Journalism Is Dying
Ever since President Trump’s miraculous victory, we’ve heard an incessant drumbeat about how legacy media is dying. This is true. The people have awakened to the reality that they’re being lied to by the self-proclaimed “Arbiters of Truth” for the sake of political expediency, corporate self-protection, and globalist ambitions.
But even as independent journalism rises to fill the void left by legacy media, there is still a huge challenge. Those at the top of independent media like Joe Rogan, Dan Bongino, and Tucker Carlson are thriving and rightly so. They have earned their audience and the financial rewards that come from it. They’ve taken risks and worked hard to get to where they are.
For “the rest of us,” legacy media and their proxies are making it exceptionally difficult to survive, let alone thrive. They still have a stranglehold over the “fact checkers” who have a dramatic impact on readership and viewership. YouTube, Facebook, and Google still stifle us. The freer speech platforms like Rumble and 𝕏 can only reward so many of their popular content creators. For independent journalists on the outside looking in, our only recourse is to rely on affiliates and sponsors.
But even as it seems nearly impossible to make a living, there are blessings that should not be disregarded. By highlighting strong sponsors who share our America First worldview, we have been able to make lifelong connections and even a bit of revenue to help us along. This is why we enjoy symbiotic relationships with companies like MyPillow, Jase Medical, and Promised Grounds. We help them with our recommendations and they reward us with money when our audience buys from them.
The same can be said about our preparedness sponsor, Prepper All-Naturals. Their long-term storage beef has a 25-year shelf life and is made with one ingredient: All-American Beef.
Even our faith-driven precious metals sponsor helps us tremendously while also helping Americans protect their life’s savings. We are blessed to work with them.
Independent media is the future. In many ways, that future is already here. While the phrase, “the more the merrier,” does not apply to this business because there are still some bad actors in the independent media field, there are many great ones that do not get nearly enough attention. We hope to change that one content creator at a time.
Thank you and God Bless,
JD Rucker
