The US empire is bankrupt - we hear that all the time nowadays online. But what does that really mean?

The money is gone

The Social Security Trust Fund apparently "invests" 100% of it's leftover funds into Treasuries. Which really means that the US government has looted the Social Security Trust Fund and left it with fiat IOUs. The fiat IOUs will slowly be paid back, of course. But with printed, devalued money.

The banks have Treasuries. Can you imagine? The US government has looted the banks. There are 17 trillion dollars worth of deposits but they're backed by toilet paper fiat IOUs.

Who else owns Treasuries? Pensions. 401k savers. University endowments. Sovereign wealth funds. High-net worth asset managers.

The Federal Reserve, the central bank of the US, also owns a bunch of Treasuries and debt that it can't liquidate because there's no demand for it.

Point is, there's no more money in the coffers, and there's no money anywhere to be seen - everyone's savings, stored in social security, 401ks, banks, and more - have been looted. China isn't going to lend to the US anymore. What does this all mean? It means that the US government needs to borrow money somehow, but there's no more places for the US government to borrow from!

But wait... there's a "lender of last resort". Sound familiar?

Debt is too expensive

Without yield curve control, long-term interest rates are shooting higher. The US government simply can't afford to pay back debt, or rollover new debt, at these higher interest rates.

So what will it do? It will implement yield curve control to artificially suppress interest rates and send money straight into the US Treasury's coffers.

In a previous blog post about a Federal Reserve research paper on fiscal dominance, I covered how the US would immediately enter fiscal dominance at 2% real interest rates. As a refresher, here's ChatGPT's explanation for what fiscal dominance is:

"Fiscal dominance is a concept in economics and monetary policy that refers to a situation in which fiscal (government spending and taxation) policies exert a significant influence or control over monetary policies, including the conduct of a central bank. In such a scenario, the government's fiscal decisions and policies take precedence over the central bank's monetary policies."

We're far past the point of no return, in my opinion, and we will soon see a monetization of the fiscal budget through yield curve control.

What does that mean? Don't hold cash, and don't hold debt! Instead, hold scarce assets that are scarce and will retain value, or will potentially be used as money such as Bitcoin.