27. February 2024

• US debt has jumped $97 billion in one week
• Financial expert Larry McDonald warns of “financial repression” due to excessive spending
• Inflation and low government interest rates are being used as a back-door way to reduce the debt-to-GDP ratio

US Debt Jumps by Billions

The US Treasury’s FiscalData platform shows that $97.7 billion has been added to the national debt between August 16th and August 22nd, bringing the grand total to $32.759 trillion at time of publishing.

Financial Expert Warns of ‘Financial Repression’

Finance guru Larry McDonald published a blog post warning of America’s “jaw-dropping” pace of spending over the last two decades, saying it is equivalent to 68% of the entire S&P 500 market cap. He believes years of “financial repression” are likely ahead, with the Fed looking to keep what savers can earn lending to the US government below inflation rate.

Inflation Used As Tax

McDonald states that inflation is essentially a tax, and raising taxes outright is politically unpopular. He notes that in order to keep government interest expense below inflation rate without causing hyperinflation, they have adopted a 15 year program instead of a 15 month program.

Debt-To-GDP Ratio A Concern

Mcdonald says that by keeping what savers can earn lending to the US government below inflation rate, it will improve the debt-to-GDP ratio so it remains sustainable for years ahead.

Conclusion

The US Government’s financial repression keeps savers from earning more than inflation on their savings while reducing overall national debt levels via slow walking measures over time – all while avoiding any major political backlash due to tax increases or reduced spending programs.