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Coronavirus: US May Soon Not Be Able to Pay Its Debt Liabilities

WASHINGTON D.C. - USA - The US may soon not be able to even pay the interest payments for its debt due to coronavirus lockdowns and quarantine.

You have to feel for poor old Donald Trump, or as we call him: The ‘Teflon’ Don. Despite the massive Democrat campaigns to unseat him, he has pushed on, a bulldozer through their attempts to screw him over, the DS likes an underdog, and we feel sad that Donald has now been dealt the coronavirus hand, crashing stocks etc. Will the Don survive this one? We will see..

You have to also feel for the millions of Americans who will suffer under the coronavirus quarantine without food, medicine or income coming in. Millions of people did not prepare, and even when they tried to stock up at the last moment, it will not be enough.

With whole cities on lockdown, tax revenue for the Federal Reserve is going to take a hit, and this is what the crux of the problem is, can America afford a shut down for months/years?

America has a known debt currently of $23 Trillion and counting, but what about its debt liabilities that are off the books?

The US has a large stockpile of potential and actual liabilities that don’t show up on as actual debt outstanding. In fact, an old working paper by University of California-San Diego economics professor James Hamilton estimates that the US was on the hook for more than $70 trillion in off-balance sheet liabilities at the end of 2012. As we are in the year 2020, we can assume that the $70 trillion debt has more than doubled since the study in 2012.

Therefore, with estimated debt liabilities in the region of $140 trillion, and a work force not working, and business shutting down, and stocks cratering, how long before cracks appear? Will China and Japan continue pumping the US machine by buying US bonds? Hell, China and Japan have their own coronavirus problems, and the clock is ticking.

The US can barely cover the interest payments for its known $23 trillion debt, so what happens when the Americans cannot even cover the interest payments for their national debt any more?

Well, say goodbye to Medicare, say goodbye to housing payments, say goodbye to social security and pension payments.

Your 401(k) will be useless, all social security payments will cease, no more pension money, no means to pay for anything. All you will have will be your guns.

In desperation the Fed recently cut interest rates spooking the markets, they then started quantitative easing again — spooking the markets further — what does the Fed know that we don’t?

The Fed proposes giving every American $1000 to get the US economy going again and spending, however they’re not telling Americans that each of them owes over $260,000 in Federal Debt terms.

This is war, and the coronavirus does not care about debt liabilities, stock market prices or social security — the virus just wants to eat, and it will keep on eating until a vaccine is found.

Britain and the EU nations will survive this simply because we are not behemoths like America is, small is good, it’s easier to manage, but big and burdensome is a hard hit, the fall will be heavy for the US, and the tectonic plates are now shifting with power and speed.

The graphic below is taken from an amazing site that has visualised the US debt and how it would look like decked out in real life.

This is what one trillion dollars looks like, so multiply this 23 times for the visible US debt and 140 times for the actual debt liabilities:

US Debt Ceiling 2012 visualized

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