- The economy needs to undergo detox…
- The REAL drug dealers controlling our economy…
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Dear Reader,
Said Treasury Secretary Scott Bessent, Friday last:
- There’s going to be a natural adjustment as we move away from public spending to private spending.
- The market and the economy have just become hooked. We’ve become addicted to this government spending, and there’s going to be a detox period.
I hazard Mr. Bessent is very likely correct.
The United States has grown addicted to government spending and accessible credit.
It must undergo heavy detoxification to shatter the self-destructive bonds of dependency.
The Sad Face of Addiction
Never before the plague year of 2020 did the United States federal budget exceed $4.45 trillion.
Not since the plague year of 2020 the United States federal budget came in beneath $6.13 trillion.
Last year it neared $7 trillion.
This year it is expected to exceed $7.2.
And next year? The United States federal budget is expected to exceed $7.4 trillion.
Mr. Musk and his Department of Government Efficiency, so-called, had better gird for heavy action.
They are in for it.
All Buck, Little Bang
The nation’s debt expanded $11.63 trillion between 2019 and 2024.
Has the United States economy maintained pace with this debt?
It has not.
The gross domestic product has stretched $6.75 trillion across the identical space.
That is, debt has outpaced growth at dreadful 172% gait.
Now mix private debt into the figure.
In 2019 combined private and public debt ran to $74.9 trillion.
By 2024 combined private and public debt scaled $100 trillion — a $25 trillion spiraling.
Again: From 2019-2024 the gross domestic product underwent a $6.75 trillion expansion.
Thus we have been treated to much buck. Yet very, very little bang.
The Drug Dealers
The stock market and the economy are addicts, it is true. Yet the United States monetary and fiscal authorities are their dealers.
It is they who introduced the false seductions of the needle.
It is they who have filled the addicts’ veins with narcotic stimulant.
It is they who will condemn the addicts ultimately to the gutter — in the absence of very difficult and agonizing detoxification.
As with many addictions, debt addiction developed over time.
It is, as the therapists label it, a “gradual disease.”
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Greenspan Got the Dope Flowing
Old Alan Greenspan administered the initial drug dose following 1987’s Black Monday.
He introduced Wall Street to the false ecstasies of central bank liquidity injections.
Hence the famous — or infamous — “Greenspan put” acquired existence.
About which, says Investopedia:
- Greenspan put was the moniker given to the policies implemented by Alan Greenspan during his tenure as Federal Reserve (Fed) Chair. The Greenspan-led Fed was extremely proactive in halting excessive stock market declines, acting as a form of insurance against losses, similar to a regular put option.
Thereafter the Federal Reserve held the needle close at hand.
Sinking Into Addiction
If Wall Street descended into despair, if the animal spirits wallowed, the monetary authority would apply that needle… and set the pharmacological cascade in motion.
The endorphins would flow in superabundance.
The developing addict came to realize that his dealer was always on call.
This certainty encouraged the recipient to undertake great gambles. Continues Investopedia:
- A consequence of Greenspan’s policies was that investors were more prone to excessive risk-taking in stock markets, leading to market bubbles, which, at times, resulted in more market volatility…
- Through Greenspan’s tenure, there were… several instances where the Fed intervened to support exorbitant risk-taking in the stock market, including market-moving events such as the savings and loan crisis, Gulf War, Mexican crisis, Asian financial crisis, Long-Term Capital Management (LTCM) crisis, Y2K, and, especially, the bursting of the dotcom bubble following the market’s peak in 2000.
The Cartel Remains, Only the Leaders Change
Drug kingpin Greenspan handed off his vast cartel to Mr. Ben Bernanke in 2006.
Under his dominion Wall Street and Main Street sunk into the deepest depths of debt addiction.
The Great Financial Crisis of 2008 was the catalyzing event. It condemned both streets to liquidity slavery.
Mr. Bernanke and his lieutenants undertook a monstrous drug-peddling operation named quantitative easing — in several rounds.
Drug lord Janet Yellen assumed chairmanship in 2014. She attempted a slight weaning called quantitative tightening.
Yet the addict was already far too gone in debt dependency.
In 2007 the Federal Reserve’s balance sheet ran to $882 billion.
By 2017 the identical balance sheet had skyshot to $4.48 trillion — a quintupling and then some more!
Full Addiction
Yet it was in 2020, under viral influence, when debt addiction shattered all limits.
By 2022 the Federal Reserve’s balance sheet rocketed to an intergalactic $8.9 trillion… some 10 times its 2007 reach.
Meantime, the Federal Reserve’s co-dealer — the United States government — hooked the addicts on the truly hard stuff.
I refer to government spending.
From 2022-2022, the United States government injected $22.23 trillion euphoria-inducing dollars into the economic bloodstream.
Yet with euphoria comes tethered to side effects — in this particular instance, a ballooning inflation.
Though partially deflated, that inflation remains up and going through this day.
Debt Addiction Rehab
The president has opened a drug rehabilitation clinic. It goes under the title, Department of Government Efficiency.
It wields strictly advisory powers, however — it cannot mandate debt addicts into its care.
It can merely encourage treatment. Thus Mr. Musk and mates are punchless.
Mr. Hegseth is attempting a sort of out-patient therapy with the Department of Defense.
He has put out demands for an 8% annual slashing of its budget.
I am far from convinced they will heed him. Have you heard of the military-industrial complex?
We’ll See
Yet it appears — at present — that the administration is hazarding a reduction in the drug supply presently embroiling us in addiction.
Hence Treasury Secretary Bessent’s comments about debt addiction and the requirement for detoxification.
I do not know the extent to which it will be implemented… if at all.
I also do not know the extent to which it would succeed.
Yet I incline heavily in the direction that it will fail.
That is because American debt addiction is far too deeply entrenched.
And the addict will not report for detoxification until he is compelled to report for detoxification.
I do not believe the court order is forthcoming.
What’s the Alternative?
I do not believe this debt addict will report for detoxification.
I nonetheless argue that he must.
It is his only salvation.
He will emerge a sober-sensed, clear-eyed, lucid-minded fellow.
He will be prepared to proceed in life.
May detoxification prove at times a burden — perhaps even underable?
I concede at once that it may.
Yet detoxification’s short-term hells will be nothing against its long-term benefits.
Let it begin forthwith.
Brian Maher
for Freedom Financial News
P.S. “Rich Dad, Poor Dad” author Robert Kiyosaki has made an absolute fortune over the years.
How? Because he knows the financial system is rigged in favor of Wall Street — not Main Street.
As a financial whistleblower in his advancing years, Robert wants to blow the whistle on today’s financial system — a loud whistle.
That’s why he’s launching a brand-new project to change all that.
It’s designed to put YOU — the so-called little guy — one step ahead of the elites.
Those elites hate it.
But it could even potentially result in the biggest wealth transfer in American history.
What is Robert talking about? And can you really outsmart the Wall Street elites to make gobs of money?
Look, I offer no promises.
