August 13, 2026
The global economy is currently tethered to a mountain of debt that has no historical precedent. We are told that deficits do not matter as long as the economy grows, yet the growth we see is fueled entirely by that very same debt. It is a circular logic that eventually leads to a dead end. Governments around the world are trapped in a cycle where they must issue new debt just to pay the interest on the old debt. This is the definition of a Ponzi scheme, but because it is backed by a central bank, it is called monetary policy. The reality is that the interest expense is now consuming a massive portion of tax revenue, leaving little for actual infrastructure or social services. This forces more borrowing, which leads to higher interest rates or the need for the central bank to step in and print more money. Either way, the currency loses value and the average person pays the price through a hidden tax called inflation.
We are witnessing the endgame of a decades long experiment in fiat currency. The sheer scale of the obligations means that there is no way to pay this back in today's dollars. The only options are a massive default or, more likely, a massive devaluation of the currency. When you see the debt clock ticking faster every second, you are watching the destruction of your future purchasing power in real time. The system requires constant expansion to avoid total collapse, but we have reached the limits of what the real economy can support.
Data Point: Interest payments on US national debt have surged, recently crossing the $1 trillion mark on an annualized basis for the first time in history.
Source: FRED (GFDEBTN)
2026-01-01
The official narrative suggests that inflation is under control and that we are heading for a soft landing. However, if you look at the prices of things people actually need, like food, insurance, and energy, the story is quite different. The Consumer Price Index is a curated basket of goods that can be manipulated through substitutions and quality adjustments. When the price of steak goes up, the statisticians assume you buy hamburger meat instead, and suddenly, the cost of living hasn't risen as much. This statistical wizardry hides the true erosion of purchasing power. The Federal Reserve uses these lagging indicators to justify their higher for longer stance or their eventual pivot, but they are always behind the curve.
They spent years telling us inflation was transitory, only to be proven wrong. Now, they want us to believe they have the tools to fix a problem they helped create. The truth is that once the genie is out of the bottle, it is nearly impossible to put back in without a major economic contraction. Central banks are essentially trying to fine tune a complex global system with blunt instruments. They raise rates until something breaks, then they print money to fix what they broke. This cycle of boom and bust is not a bug in the system. It is a feature of a debt based monetary order that requires constant inflation to devalue the debt over time.
Historical Context: During the 1970s, inflation came in three distinct waves. Each time the Fed thought they had won, it roared back stronger because the underlying structural issues were never addressed.
Source: FRED (CPIAUCSL)
2026-07-01
The backbone of the economy is the consumer, and that backbone is starting to crack. For a long time, people were able to maintain their lifestyle by dipping into pandemic era savings. Those savings are now gone. To fill the gap, consumers have turned to credit cards and buy now, pay later schemes at an alarming rate. We are seeing a divergence where the top tier of society is doing fine because of asset inflation in stocks and real estate, while the bottom 60 percent is struggling to make ends meet. Delinquency rates on auto loans and credit cards are rising, which is a classic late cycle indicator.
At the same time, the housing market is frozen. High interest rates have made mortgages unaffordable for new buyers, while current homeowners are locked into low rates and refuse to move. This lack of inventory keeps prices artificially high, even as demand craters. It is a dysfunctional market that cannot be sustained indefinitely. Eventually, something has to give, and usually, it is the consumer who breaks first. When people can no longer afford the basics, they stop spending on discretionary items. This leads to lower corporate earnings, which leads to layoffs, which further reduces consumer spending. This feedback loop is how recessions begin. The signs are all around us, but they are being ignored by those who benefit from the current bubble.
Data Point: Total household debt in the United States has reached a record high of over $17 trillion, with credit card balances specifically seeing double digit year over year growth.