Treasury Secretary Janet Yellen recently announced that U.S. central government will hit the debt ceiling one day after Trump takes office, on January 21, 2025. That is to say, it will essentially be “out of money” because it will no longer be able to issue more new debt (U.S. bonds) to cover its operating deficit.
Debt is required because U.S. central government spends more money than it takes in (spending $7 trillion per year against annual tax receipts of $5 trillion). As a frame of reference, the shortfall ($2 trillion) is the same size as the entire Russian economy (as measured by GDP).
Washington DC is a giant cesspool of waste, corruption and incompetency.
And when one Party does so much to destroy the operating condition of a country so that the incoming Party is immediately thrown into crisis in hopes it will fail – it is nothing short of an act of war between the Parties.
With We the People caught in the middle.
That makes the American countryside the battleground.
And sooner or a little later the financial markets will reflect that condition.
Investors of every kind – big or small, active or passive, locked into 401ks or free to decide – need an updated plan of action that takes everything into account.
Civil unrest following Trump’s inauguration is almost certain to persist. The radical left-wing in America is hardline communist, and they will not relinquish power without a serious fight – one that will likely spill into the streets.
Democrat leaders have already commissioned radical left-wing flamethrowers like BLM and Antifa (their version of Hamas and Hezbollah) – along with millions of new recruits that entered illegally through a wide-open border door for four long years – to take their resistance to the public.
Trump is leading a revolution against them and their big government, central planning ideology – let there be no mistake. He and his army of Patriots seek to return America back to its libertarian promise and constitutional founding. They know the battle won’t be easy, or speedy.
And that it will find each and every one of us.
That is the battle before us – Do we preserve freedom and independence for our next generation?
Or do we lose it?
This “fiscal cliff” is just another flare-up in a series of many throughout recent years. But this one is the beginning of the climax – a period of adjustment that will become known as the Great Devaluation, and just one front in the domestic war Trump must prosecute.
Promising to cut $2 trillion from federal spending, Trump knows that he must gut a very fat pig to be successful. And he knows not only the chances, but the consequences of recession spending cuts will push along. But it must be done.
America needs fiscal sanity, a secure country, and major surgery to remove to remove a stage-4 tumor called communism, lead by Biden and Obama, and carried out by their Kool-Aid drinking posse.
A good start would be to limit government spending to be no more than 75% of annual tax receipts until total federal debt is less than 75% of GDP.
That’s not too much to ask.
A return to fiscal responsibility would help solve the inflationary condition and shrink government impact – a recession there is more than welcomed.
Federal indictments must be made for all those who can be proven to be corrupt and/or foreign agents – Democrat and Republican alike. Arrest, impeach, and try them all – and let governors of the many States pick their replacements – under new and self-imposed term limit rules – that We the People and States will ratify at some later date by constitutional amendment.
These are mandates We the People should demand from Trump, his team and allies.
And We should do so LOUDLY and CLEARLY.
If Trump leads that cause and wins on all fronts he will transcend today and become historic, mentioned in the small group of the elites that includes Lincoln, Washington, Jefferson, and Teddy.
Trump has that kind of opportunity.
But not before some really difficult times occur – including another major financial crisis that will rock global markets and ignite panic and fury around the world.
And that’s because today’s fiscal and monetary system is corrupt and insane and highly inflationary.
Correction is exceedingly warranted and long overdue.
These are tremendous opportunities for investors with dry powder and a winning strategy.
As you may know, I coach investors of all levels through the investment process, which begins with a candid assessment of the Market’s condition and ends with a strategy to capitalize.
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Stay tuned…