May. 21 at 1:59 AM
$GLD $GDX $B $JNUG $SLV
The U.S. is massively over-leveraged, yet some people seem to think Warsh is going to aggressively raise rates. But how does that actually work?
At higher rates, the U.S. could end up paying an estimated
$1.75â
$2 trillion annually just on interest expense â potentially consuming 50% or more of total tax revenues. Thatâs not how you keep the game going.
Then thereâs the U.S. consumer. Consumption makes up roughly 70% of GDP, & households are already carrying around
$18 trillion in debt â not even including BNPL balances or medical debt. Aggressively raising rates into that environment risks slamming the brakes on the economy: surging personal bankruptcies, corporate defaults & a severe contraction in spending.
At that point, the govt would likely have no choice but to step back in with liquidity & stimulus to stabilize things again.
Thereâs no clean way out anymore â only trade-offs on how you get fu#ked
