Loading ...This chart reveals the mathematical certainty behind the coming precious metals bull market. It’s not a question of if, but when.
H/T LUKE GROMENLook closely at the chart above. This isn’t a political statement; it’s a mathematical death sentence for the U.S. dollar. As economist, engineer and financial analyst Lyn Alden has famously stated, “nothing can stop this train.” The largest expenses in the federal budget; Health & Human Services, Social Security, Treasury, Defense, and Veterans’ Affairs; are not just massive; they have politically untouchable, non-discretionary increases baked in every single year. They are going higher. Much higher. There is nothing meaningful to cut. The blue arrows on the chart represent the fantasy of the Wall Street and Federal Reserve establishment: that the government can somehow slash benefits for seniors, veterans, and the poor to balance the budget. The red arrow represents President Trump’s only viable alternative: force the Federal Reserve to dramatically cut interest rates to reduce the government’s borrowing costs. This seems to be underway, however could be a long process. This is the real battle, the one that will define the next decade: the people versus the banks, as Lord Acton once said. And the outcome is already predetermined. The train of debt is unstoppable, and will continue to be, unstoppable. The Debt Spiral Death MatchHere is the brutal, mathematical reality that the chart lays bare. The U.S. is facing a tidal wave of maturing debt; something to the tune of $10 trillion over the next year or so alone; that was issued when interest rates were near zero. And this maturing debt problem continues for years to come.
The aggregate interest rate on this coming due mountain of paper is under 2%. Today, despite the Fed’s recent token rate cuts, the Federal Funds rate is still over 4%. Do you see the problem? Debt servicing costs will soar beyond comprehension if they don’t get the borrowing costs down and for several years to come. Every time a Treasury bond matures, it must be “rolled over”; refinanced with new debt at today’s much higher rates, because they can’t pay it off. This causes the nation’s debt servicing costs to explode higher. Higher interest payments increase the budget deficit, which forces the Treasury to issue even more debt, which in turn pushes interest rates higher still. It is a vicious, self-reinforcing doom loop. A debt spiral. This is the real reason President Trump is publicly calling for the Fed to dramatically lower interest rates. It’s not about the stock market, not really. It’s about the solvency of the United States. He is trapped by the maturing debt situation. He cannot cut spending in any meaningful way, so his only option is to force down the cost of borrowing. Why Mining is Now a Matter of National SecurityBut here is where the story takes a fascinating and incredibly bullish turn for precious metals and mining. Dramatically lowering interest rates in the current environment, with most asset classes already at or near all-time highs, would be like pouring gasoline on a bonfire. It would almost certainly ignite a speculative mania in the stock market, reminiscent of the dot-com boom. Let’s dig deeper into this new paradigm we have entered… © 2025 Metals and Miners, LLC. |
