The latest Consumer Price Index inflation report came in a little cooler than expected Wednesday, and naturally, we got a pop in the market. The headline inflation rate is moving closer to 2%, which sounds great on the surface.
But let’s be clear — we are not going back to zero rates. That’s just not going to happen.
Why? Because we have a $37 trillion debt problem that nobody in Washington seems to want to take seriously. The only real solution on the table is to inflate that debt away over time. And that means we’re going to be living with higher rates and higher inflation for the foreseeable future.
Go take a look at usdebtclock.org — it’ll scare the pants off you. We’re talking about $323,000 of national debt per taxpayer. I don’t know about you, but I don’t owe $300,000 on anything — except apparently on the national debt.
This is completely unsustainable and will eventually lead to chaos in the markets.
Why This Debt Bomb Could Explode Sooner Than You Think
This isn’t just some abstract number sitting on a government website. The imbalance between debt per citizen and revenue per citizen is staggering.
We can’t even come close to balancing the budget at this point. Yet politicians keep passing spending bills that add trillions more to the pile.
Even though today’s CPI came in below forecast — core inflation was still 2.8% — none of this changes the bigger picture. A single data point doesn’t fix structural problems like runaway debt and unsustainable government spending.
In fact, it masks them.
Here’s what really worries me — complacency. People assume the U.S. will always be the world’s reserve currency, that we’ll always be able to roll over our debt at reasonable rates. But that’s a dangerous bet. Remember, nobody saw Lehman Brothers coming until it blew up.
The same could happen with our debt.
The refinancing risk alone should keep investors up at night. We’re rolling over trillions at higher rates, building a house of cards that will topple with the wrong shock to the system.
So don’t get lulled to sleep by a softer CPI print. This debt crisis isn’t going away — and when it finally matters to the market, it’s going to matter in a big way.
Jeffry Turnmire
Jeffry Turnmire Trading
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