As I was writing my article last week, I mentioned about how many ridiculous ideas were out there to kick the economic can down the road. I also mentioned that our only real option was to get back to our roots of hard work and thrift.

I also believe that we need a stronger currency. This could be accomplished with HIGHER- not lower interest rates or backing or partially backing the US dollar with gold, silver or other hard assets. This would likely lead to FAR lower stock prices but LOWER prices for our necessities. Which is better for YOU?

Every single “idea” that seems to get floated out concerns creating more cash out of nowhere to:

· Prop up stock “markets” for the illusion of a strong economy.

· Conjure up cash and buy MASSIVE amounts of bonds to foster artificially low interest rates to make the financing of our daunting debt easier and also to help keep the stock “markets” propped up.

· Put tariffs on anyone and everyone to punish supposedly unfair trade practices. Of course, the main PAYER of tariffs are the CONSUMERS. (You and me). All tariffs do is raise the price we pay for EVERYTHING.

· Conjure up paper contracts to keep the price of gold and silver suppressed so that the decline of our purchasing power is also disguised so we keep the illusion of “strong dollar” as we are paying MORE and MORE for everything.

· Sell $5 Million dollar gold cards to foreigners to make them citizens and hope they buy US assets. (More cash to make prices zoom higher)

· Trillion-dollar coins- it goes on and on.

It appears with these ideas that we are not only fiscally bankrupt but morally as well. All of these ideas have one thing in common. They all rely on more debts, more deceit, and a WEAKER US dollar. (Lower living standards for wage earners)

I think the best thing we can do is to first of all admit that we are bankrupt. No more games- no more “printing and buying” schemes as well as conjuring up cash to make up for our lack of productivity. This just gives an illusion of solvency where it does not exist without the games.

Once we admit we have a problem- our first step towards a lasting solution- we can then produce ideas that may help us get out from our debt burden and back to a sustainable growth path.

This will entail WAY outside the box thinking. Personally, I believe the current administration just MAY have a plan that they have not rolled out yet. Remember, Mr. Trump has some experience in bankruptcies.

Keep in mind that when a company goes bankrupt, and the debts overwhelm the assets, all holders of that company’s stock and bonds lose it ALL. However, if the company still has value, it is reorganized and secured shareholders get shares in lieu of their bonds in the reorganized company.

Often times- because all of the infrastructure, employees and contracts that are still there, it is possible for that company to become a stable revenue source and make a fortune. Why? All the debt is wiped out and they have a clean slate.

So, what does this have to do with retiring our debt?

Mr. Bessent, (Treasury Secretary) has said we are going to monetize the assets of the USA.

This could be done in such a manner that it could be a win-win for the bondholder and the USA as well.

That bondholder, if nothing changes- particularly those holding longer-dated bonds are going to be paid back with a DRASTICALLY lower-value dollar if we continue on this path. Day by day it appears that longer-dated US debt gets less desirable. This is likely why central banks are dumping bonds and buying gold in record amounts.

Let’s say the government owns, buys, or privatizes toll roads, bridges, power plants, etc. and offers a swap of your US Treasuries for a stake in a necessary industry. Basically, just like the debt for equity swap that takes place in a corporate bankruptcy. Since the ownership unit is in an industry that should provide possible growth and most likely pays dividends it could alleviate the need for so much “printing”, reduce the USA’s interest expenses- as a lot of bonds could be converted to equity- and our taxes could be used to pay down the debt. If this were to happen, we would be using assets that produce a return rather than conjuring up cash and experiencing exponential debt growth.

This at least would allow us to put our assets to work instead of the “printing” presses.

While this would not address the UNFUNDED LIABILITIES of over $200 TRILLION it may give us some breathing room to address that down the road.

Our future generations deserve a LOT better than what it appears we are leaving them with right now.

I am sure that this one idea would be just a partial answer, if it is an answer at all, but along with a revaluation of gold and some other actions we may have a chance to get back to a more stable and growing economy.

After many years of denial, it appears that many are starting to wake up to the fact that we cannot continue down this road much longer. Things are about to DRASTICALLY change. The main question is can we make it an orderly transition, or will it take a collapse of historic proportions before we can recover and move on?

A good question to ask yourself is “If things do drastically change and the assets being artificially propped up fall and the assets being artificially repressed surge higher what will MY portfolio look like?” Am I positioned for a paradigm change- or at least hedging against it or am I counting on the Fed to have my back? If the latter- I wish you luck- you will need it. The Fed cares about its shareholders- the major banks- NOT you and me.

It appears to me that any solution will include ASSETS and not someone else’s “promise to repay”.

Be Prepared!

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