Mainstream media pundits and politicians generally act unconcerned about the skyrocketing national debt and ever-growing budget deficits, but somebody has taken notice.
On Friday, Moody’s Investor Service lowered its outlook on US government credit from “stable” to “negative.” This could be a prelude to a downgrade in the country’s AAA credit rating. The agency typically resolves an outlook by either revising it back to stable or executing an actual downgrade within 18 to 24 months.
Mainstream financial network pundits and government officials keep telling us that the economy is chugging along because Americans continue to spend money. But it’s clear that borrowing is the only thing sustaining this spending spree.
Meanwhile, the “resilient” American consumer is drowning under a surging tidal wave of debt.
Is war and military spending really good for the economy?
A lot of people seem to think so. In fact, President Joe Biden is selling the latest proposal to send military aid to Israel and Ukraine as an economic stimulus plan. But this notion that spending money for war somehow boosts the economy is rooted in a pervasive economic fallacy.
Chalk one up for the status quo.
As expected, the Federal Reserve held interest rates steady in a range between 5.25 and 5.5% for the second straight FOMV meeting, and chairman Jerome Powell was intentionally noncommital about future Fed moves.
The European Central Bank (ECB) is laying the groundwork to roll out its version of a central bank digital currency (CBDC).
According to the ECB’s website, the “preparation phase” for the digital euro begins in November and “builds on the findings from our investigation phase.”
How in the world did the Toronto airport lose $15.3 million in gold bars along with $1.9 million in cash?
That remains unclear, but a lawsuit filed by Brink’s shed a little bit of light on the situation.
Are the Chinese selling US dollar-denominated assets to buy gold?
It sure looks that way.
The Biden administration ran a $1.695 trillion budget deficit in fiscal 2023. It was the third-largest deficit in US history. The only time the US government ran bigger deficits was during the COVID years of 2020 and 2021.
The government closed out the year with a $170.98 billion deficit in September, according to the final Monthly Treasury Statement of the fiscal year. That was more than double the projection.
Problems in the commercial real estate (CRE) sector continue to bubble under the surface. This is a major stress point for US banks and could precipitate the next phase of the financial crisis.
A combination of high interest rates and declining tenancy is putting the squeeze on commercial real estate owners. As a result, banks hold a growing portfolio of delinquent CRE loans.
Global debt rose $10 trillion to a record $397 trillion in the first half of 2023, according to the Institute of International Finance (IIF).
The big increase in debt occurred despite tightening credit conditions, and it is an increasingly worrisome problem because the “free lunch” of artificially low interest rates is over.
