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The single most important chart in the world is flashing “danger”.

The defining issue of the last ~45 years has been the secular bull market in bonds. From 1980 until 2022, the yield on the U.S. debt (called Treasuries) was in a downtrend. In the very simplest of terms, this meant that throughout this time period, debt became ever cheaper to service. As a result of this, every entity in the U.S. whether it be corporations, municipalities, and even the U.S. itself as a sovereign nation, went on a debt binge.

Today, there is $3.4 trillion in municipal debt, $14 trillion in corporate debt, $20 trillion in household debt, and $37 trillion in Federal debt outstanding. Throw in student debt, auto loans, and every other kind of future liability and the U.S. is sitting on over $100 trillion in debt.

All of these are problematic, but the SYSTEMIC issue pertains to U.S. sovereign debt.

It took the U.S. 232 years to hit $10 trillion in debt. It added its second $10 trillion in debt in just nine years. It added its third $10 trillion in five years. And at its current pace, it will hit $40 trillion in debt within the next 24 months.

(Click on image to enlarge)

To be clear, the U.S. has had a debt problem for years. That’s nothing new. What IS new is that the bull market in bonds, the macro setup that allowed the U.S. to issue all this debt is OVER.

I showed this chart yesterday. I’m showing it again today because it is THE most important chart in the world. It’s a chart of the 30-Year U.S. Treasury. As you can see, the bull market in bonds is OVER. When inflation arrived in the financial system in 2022, it triggered a tectonic change.

Put another way, the era of ever cheaper debt is OVER. For the first time in 45 years, it is costing the U.S. MORE to issue new debt (or roll over old debt).

So why hasn’t the U.S. entered a debt crisis yet?

Because these bonds have been consolidating since 2022. And the next move will determine whether the U.S. stays afloat, or the great debt crisis of our lifetimes is about to begin.

See for yourself.

From 2022 until today, the long-end of the Treasury market has been trading in a range (purple rectangle in the chart below). This is called a consolidation period. And it’s 100% to be expected after a bull market ends (no asset goes straight up or down in the markets.).

What happens next is CRITICAL. If these bonds break down from this consolidation, it signals that the grand Supercycle in bonds is OVER and a secular bear market has begun.

In the very simplest of terms, the Everything Bubble would have burst and the great debt crisis of our lifetimes would begin. I’m not writing that to scare you, but because, again, this is THE most important issue in the financial system today. And smart investors need to be preparing for this BEFORE it happens.

This is literally a ONCE in a lifetime opportunity. The U.S. has had a debt problem for decades… but the great inflationary collapse looks to finally be arriving now.

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