A spate of relative calm in the markets has lulled some people into a false sense of financial security. In reality, the faultiness that caused rampant inflation, currency devaluation, and bank collapses is still active in the economic landscape. Some outspoken financial leaders are sounding the alarm bells as the US economy inches closer to an impending crisis.
Watch this week’s The Gold Spot to hear Scottsdale Bullion & Coin Precious Metals Advisor John Karow and Founder Eric Sepanek unpack these warnings, discuss why neither political party is the solution, and uncover the controversial policies behind the US debt crisis.
Javier Milei Grills Davos
Javier Milei, the newly elected President of Argentina, took the opportunity to dig into the unelected financial establishment during his speech at Davos. The political firebrand subjected these elites to a half-hour harangue warning against the dangers of collectivism and illuminating the serious economic risks facing the West.
An economist by profession, President Milei, soberly explained how “the inevitable outcome is poverty” when fiscal leaders pass “measures…that hinder the free functioning of markets, free competition, and free price systems.” Using his home country of Argentina as a real-world example, Milei demonstrated the destructive effects of such policies.
Just a few decades ago, Argentina was one of the wealthiest countries in the world. Now, after years of embracing collectivism, it’s reporting astronomical inflation rates of over 200%. At once, the speech was a scathing indictment of the global elites’ flirtations with socialist policies and a warning to everyday investors about the consequences of this dangerous path.
Jamie Dimon Warns of Economic “Rebellion”
Jamie Dimon, the CEO of JPMorgan Chase, echoed these concerns by warning of an incoming worldwide .” At the Bipartisan Policy Center, the world’s second-largest bank leader emphasized the situation’s urgency, highlighting the colossal national debt of $34 trillion.
Unconvinced by planned rate hikes, reduced unemployment, or decreased inflation, Dimon stressed that the country’s debt burden is exacerbated by exponential interest rates. The economy is facing this insurmountable mountain of debt while running headlong into a period of stagnation, in the best-case scenario.
To illustrate the extraordinary growth in US debt, Dimon pointed to the 1980s. Despite an abysmal unemployment rate of 10% and a lifeless stock market, the debt-to-GDP ratio was still reasonably at 35%. Today, it’s skyrocketed to 100%. Dimon predicts this ratio will hit 130% by 2035.
Spending is a Bipartisan Problem
Many investors hold out hope that a Republican president and a GOP majority in the legislature will plug the spigot of spending and usher in a new era of federal belt-tightening. Unfortunately, the performance of previous administrations and the voting pattern of politicians don’t bear this out.
There’s one thing bipartisan in Washington: spending money and not giving a care about what the result is on the other end.–
The status quo of laissez-faire spending in Washington isn’t going away any time soon. The biggest manageable risk facing investors is complacency. Argentina’s Milei and JP Morgan’s Dimon are the canaries in the economic coal mine warning about the compromised infrastructure of the US and global economy.
The Failed Policies Behind US Debt Crisis
The collectivist economic policies of limitless borrowing, unchecked spending, and countless government bailouts are hallmarks of the experimental Modern Monetary Theory (MMT). This controversial economic theory is the driving force behind skyrocketing national debt and the negative impact of US debt.
We’ve put together a comprehensive MMT report to help investors better understand how these corrosive policies have taken over our fiscal policies and sealed our economic fate. Request your FREE COPY of our Modern Monetary Report Today!