U.S. government debt surged to over 100% of GDP in 2020. Although government revenues have improved since the depths of the pandemic, the overall fiscal picture has gotten even uglier.

Veronique de Rugy writes in Reason:

Enabling excessive debt-financed spending to continue is no strategy for averting a “calamity.” It’s merely kicking the can down the road in hopes of staving it off a while longer.

Neither Janet Yellen, nor Chuck Schumer in the Senate, nor Kevin McCarthy in the House have proposed any viable path to paying down what the government owes.

Left unspoken in Official Washington is the shared assumption that inflation will be the primary tool for managing the otherwise unmanageable debt load. As long as the supply of new Federal Reserve notes keeps expanding at a sufficiently rapid pace, there will always be enough “dollars” to service previously accumulated debts.

Under a fiat monetary system unconstrained by gold, a sovereign debt default can always be staved off. But what cannot be avoided is the currency crisis that follows from “solving” the debt crisis.

• Wednesday, May 10th – Consumer Price Index. The CPI is expected to come in at 5.5%. That would be a slight improvement from the prior month’s 5.6%, but nowhere near the Federal Reserve’s 2% inflation target.
• Thursday, May 11th – Producer Price Index.
• Friday, May 12th – Consumer Sentiment.

This week’s Market Update was authored by Money Metals President Stefan Gleason.

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