As banks across Canada are closing due to the sheer number of citizens taking their money out of banks. Here in the US, the situation is beginning to look similar. The trucker rally’s are heading to DC. Once they get there, we will see how the Biden Administration reacts. Too soon to know that now. However the pension system is clearly underwater. This next chart shows a $1.4 trillion deficit in funding US Pensions in 2021. Every year this deficit or unfunded liability gets worse. Below is the chart:
If you are asking why, the next chart will help explain it. These are the longest bond bear markets in 10 yr treasuries. All of these bear markets lasting the longest, have been since 2013, with the lone exception being the 309 day 98’ to 99’ bond bear market. The current bear market has lasted 547 days! We can expect, due to the length of this bear market, a small rate hike in March. However, this bubble is so big, we question the Fed will be willing to let this correction play out. Here is the chart below:
A week ago, in a blog, we said if 10 yr bond yields were 11.5% the cost of federal debt service would be $3.3 trillion. Now let’s expand on that! That was 10 yr bond yields in 1982! Back then Paul Volker (Fed reserve chairman) was able to raise rates like that. Not possible now because federal debt is $30 trillion. In 1982 it was $1 trillion. Debt service on $30 trillion will be too expensive. Therefore, the Fed HAS TO devalue the dollar! No way around it. However, fiat currencies, governments, and central banks, that foist them on their citizens worldwide. They don’t want any alternative to a devalued dollar. So what do they do?
Here is what they do, they threaten the countries that have made Bitcoin legal tender. They don’t want this freedom to spread: