Higher and higher we go!
The rest of the World seems a bit tired but the S&P, Dow and Nasdaq are like the energizer bunnies of the Global Indexes as they keep going and going and going…
Earnings don't matter, Fed policy doesn't matter, news doesn't matter – IT just doesn't matter! – and that's something I haven't had to say since the bad old days before the last crash. Still, here we are again, just 6 years after a catastrophic market collapse – ignoring wave after wave of negatives as if they JUST DON'T MATTER.
Well, it's true in a way, nothing really matters – until it does. For example, did you know, on Friday, that our nation's debt passed the $18Tn mark? Even I was surprised by that one as our debt just topped $17Tn last November so adding another Trillion in a year seems kind of quick, don't you think? Don't worry though – there's 150M workers so all we have to do is each come up with $113,333 each and we're all sqare.
If we DON'T all come up with a quick $113,333, then we may have a problem as the interest on $18,000,000,000,000.00 at even just 2% is $360Bn per year, which by itself is $2,400 for each working American. The reason the tip 1% tell us not to worry about the debt is because $2,400 isn't very much to people who earn $10M+ per year but, for those of you earning the average $48,000 a year – it's 5% of your salary.
Notice the projection for the next 6 years takes us to $23Tn and let's say interest rates head up to 4% – then, suddenly, the annual interest is about $1Tn per year and that's now $7,500 per working American – just to pay the interest! We could default, but there goes your Social Security as we've already robbed that lock box of close to $3Tn to fund our (so far) $18Tn debt.
We'd also be defaulting on the $5Tn the Fed has lent us. So screw them, right? No, actually…
