Higher and higher we go! 

The rest of the World seems a bit tired but the S&P, Dow and Nasdaq are like the energizer bunnies of the Global Indexes as they keep going and going and going…

Earnings don’t matter, Fed policy doesn’t matter, news doesn’t matter – IT just doesn’t matter! – and that’s something I haven’t had to say since the bad old days before the last crash.  Still, here we are again, just 6 years after a catastrophic market collapse – ignoring wave after wave of negatives as if they JUST DON’T MATTER.  

Well, it’s true in a way, nothing really matters – until it does.  For example, did you know, on Friday, that our nation’s debt passed the $18Tn mark?  Even I was surprised by that one as our debt just topped $17Tn last November so adding another Trillion in a year seems kind of quick, don’t you think?  Don’t worry though – there’s 150M workers so all we have to do is each come up with $113,333 each and we’re all sqare.  

If we DON’T all come up with a quick $113,333, then we may have a problem as the interest on $18,000,000,000,000.00 at even just 2% is $360Bn per year, which by itself is $2,400 for each working American.  The reason the top 1% tell us not to worry about the debt is because $2,400 isn’t very much to people who earn $2M+ per year but, for those of you earning the average $48,000 a year – it’s 5% of your salary.

Notice the projection for the next 6 years takes us to $23Tn and let’s say interest rates head up to 4% – then, suddenly, the annual interest is about $1Tn per year and that’s now $7,500 per working American – just to pay the interest!  We could default, but there goes your Social Security as we’ve already robbed that lock box of close to $3Tn to fund our (so far) $18Tn debt.  

We’d also be defaulting on the $5Tn the Fed has lent us.  So screw them, right?  No, actually the Fed merely lends us our own money out of Treasury, who ultimately bear any losses incurred by the Fed.  No wonder they are so happy to spend money over there – no consequences!