The federal government added another $200 billion-plus to the budget deficit in August, pushing the fiscal 2020 budget shortfall to over $3 trillion with one month still left in the fiscal year.
Uncle Sam continues to rack up enormous monthly budget deficits. The August shortfall came in at $200.1 billion, according to the Treasury Department’s Monthly Treasury Statement, pushing the fiscal 2020 budget shortfall to $3.01 trillion. That’s more than double the previous record deficit of 1.413 trillion set in FY 2009 at the height of the financial crisis.
According to CBO projections, the federal budget deficit will come in at $3.3 trillion for fiscal 2020. That’s more than triple the budget shortfall last year and more than double the previous deficit record set at the onset of the Great Recession.
The federal budget deficit for July was only $63 billion, according to the latest Monthly Treasury Statement issued by the Treasury Department.
Of course, $63 billion is a huge budget shortfall. I say “only $63 billion” simply because it pales in comparison to the $864.1 billion deficit in June. In reality, the July deficit continues the trend of unprecedented borrowing and spending we’ve seen throughout the year.
On June 9, the national debt surged above $26 trillion. Just over one month before that, the debt eclipsed $25 trillion. And 28 days before that, the national debt stood at a mere $24 million. May’s budget shortfall came in at a staggering $398.8 billion, pushing the fiscal 2020 deficit to $1.88 trillion
And there is no end to the borrowing and spending in sight.
Jerome Powell ventured to Capitol Hill – virtually – to talk to Congress this week. Powell did what he does best – blew a lot of smoke. Meanwhile, the central bank upped its stimulus ante yet again. In this episode of the Friday Gold Wrap podcast, host Mike Maharry talks about the impact the Fed is having on the economy, along with the news of the week in the gold market.
Last week, we reported Yale economist Stephen Roach’s warning that “the era of the US dollar’s ‘exorbitant privilege’ as the world’s primary reserve currency is coming to an end.”
Roach isn’t the only person in the mainstream sounding the alarm about the dollar’s demise. In a note published last week, Guggenheim Investments Chief Investment Officer Scott Minerd said that while “there are no signs the world is questioning the value of the US dollar” right now, it’s clear that the greenback is “slowly losing market share as the world’s reserve currency.”
The national debt pushed above $26 trillion last week. In just a little over two months, the US government has added over $2 trillion to the debt. The budget deficit has already set an all-time record with four months left in the fiscal year. In April, the US Treasury sold $1.287 trillion in additional US debt.
So, who is buying all of this debt?
The Federal Reserve met this week and promised to keep pumping out monetary stimulus indefinitely. Meanwhile, the US government added another trillion dollars to the national debt in just 35 days even as the president and congressional leaders talk about more fiscal stimulus. In this week’s Friday Gold Wrap podcast, host Mike Maharrey talks about the ramifications of all this endless stimulus and reminds us that what can’t go on forever, doesn’t. He also covers the week’s ups and downs in the gold market and reveals that the May unemployment report appears to be fake news.
People keep talking about the “new normal” we’ll all have to adjust to as we recover from the coronavirus pandemic. So, what does that mean for the economy? In this episode of the Friday Gold Wrap podcast, host Mike Maharrey looks ahead at the new normal, the prospects of an economic recovery and speculates that we might have already caught a glimpse of the future last year. He also covers the gold market and looks at some of the economic data this week.