$39 Trillion In Debt. There’s Only One Way Out. And You’re Paying For It.

The next round of inflation is coming shortly.

The U.S. now has $39.4 trillion in public debt. This is up over $3.2 trillion in the last 12 months alone. Yes, the U.S. has increased its debt by 10% in a single year.

Let’s be clear. There are three ways to deal with debt.

1. Pay it off.

2. Default/restructure.

3. Attempt to “inflate it away” by devaluing the currency so that every future dollar in debt payments is worth less.

Policymakers have been attempting #3 since the late 1990s. The U.S. dollar has lost 50% of its purchasing power since that time.

This situation is now accelerating. It took the U.S. 232 years to hit its first $10 trillion in debt. It added its second $10 trillion in just nine years. Its third $10 trillion took just five years. And it will add its fourth $10 trillion in four years.

Nothing stops this train. U.S. debt and Treasuries are the bedrock of the current financial system. There are over $200 trillion in over-the-counter derivatives that trade based on their yields. In this context, a debt restructuring or default by the U.S. would trigger a systemic crisis that would make 2008 look like a picnic.

This means policymakers have no choice but to keep inflating the debt away — which means more money printing and a weaker dollar. Another round of inflation is coming shortly. The bond market knows this. Take a look at the yield on the 10-Year U.S. Treasury, which is about to break above critical resistance. Inflationary pressures are building.