The U.S. Treasury announced last week that they will be issuing $3T in bonds, in the second quarter, to pay for the recent fiscal and monetary stimulus packages. How do we put that staggering number in perspective?
1. $3T is roughly $10K per person. 2. $3T is nearly 5x larger than the previous quarterly high, of 2008.
And more is coming; $3T is just the beginning. An additional future stimulus is likely needed. Moreover, last year we spent $1.3T more than we made, and that trend was expected to continue this year…meaning, we still have to pay for the remainder of the fiscal year.
The $3T will be added to our existing debt level of nearly $25T. The investment implications of living-beyond-our-means, to the tune of $28T, need to be considered.
The following questions are tackled in today’s Rich Insights video: 1. Will this cause interest rates to rise? 2. Will this generate inflation? 3. Will the US$ finally weaken? 4. Will gold, and other precious metals, react?
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