Postcards: What I Should Have Dressed as For Halloween

Dang it. I had it in front of me the whole time. I could have been the scariest thing that you'll see all 2024... and beyond. And all I needed was two pieces of cardboard, two Sharpies, and some tape.                                                                                                                                                                                                                                                                                                                                                                                                                 Forwarded this email? [Subscribe here]() for more [Postcards: What I Should Have Dressed as For Halloween]( Dang it. I had it in front of me the whole time. I could have been the scariest thing that you'll see all 2024... and beyond. And all I needed was two pieces of cardboard, two Sharpies, and some tape. [Garrett {NAME}]( Nov 17   [READ IN APP](   Dear Fellow Expat: We did our first real Florida Halloween spin through the neighborhood two weeks ago. I use the word “spin” because we rode the golf cart through the less agricultural area. [As I noted]( my daughter was sick for three straight Halloweens, so this was her first real event. After all the hype, the woman at the first house she visited gave her a pack of [Ramen noodles](. They still sit in the pantry a fortnight later. My daughter was very adamant that I dress up for the trip. While she had asked my wife to dress as Anna from Frozen!, I wasn’t included as any of the title characters. Instead, she asked me to wear “That silly orange suit…” You know… This. Did not find video I told people I was “Inflation,” but they also couldn’t hear me over the small mechanical motor in that suit. Maybe I should have come up with a better costume. Next year, this idea will be my mulligan. [Upgrade to paid]( The Scariest Halloween Costume Ever? That costume was a bust… Next year, I’ll get two cardboard signs, two Sharpies (red and black), and a few pieces of string. Then, I’ll draw a chart on one side. And when the neighbor asks: “What are you supposed to be?” I can tell them… “An Economic Reckoning.” Here’s the chart. Now, please look carefully at it. [A graph showing the growth of the high and high value of debt Description automatically generated]( This is data from the U.S. Treasury and Congressional Budget Office (CBO). The black line is the current debt held by the public projections. Debt held by the U.S. public will hit 200% of the U.S. GDP by 2040. At that point (while I’m just a few years away from Social Security), the doors are completely blown off the hinges. You can’t come back from that level. The U.S. continues to reel like a drunk toward “Destination Dumpster Fire”: $50 trillion in debt by 2032. And that’s just the baseline. Add another pandemic, third war, or major credit crisis, and that number could balloon further... We’ll likely hit $41 trillion by 2026 - and I’m willing to take the “low” there. I’m not going to sit here and be optimistic about it. I’m going to look at reality. And reality says that we’ll likely move much faster. That’s because we have a nation with $33.7 trillion in debt… plus hundreds of trillions in unfunded liabilities like Social Security and Medicare that are being funneled from one generation to the next like a Bernie Madoff conveyor belt. Why is that getting worse? Because U.S. social payments continue to rise. The number of Americans who are part of the workforce is expected to decline, not rise, over the next few decades. And – what’s worse? Americans are already stretched when it comes to holding debt. And that’s where the red line comes in. [A graph showing the growth of the high and high value of debt Description automatically generated]( That’s the REAL debt spiral - the refinancing crisis in one parabolic rise - based on historical highs and breakneck increases in debt like we’ve seen recently. That’s what’s more likely coming in the future if they don’t get this under control. So, what’s the end game? Americans will be forced to own more and more U.S. debt, possibly through enhanced government-run programs (retirement programs like MyRA). And that’s how they’ll aim to create more bonds and continue blowing the debt even higher. It just can’t all fall on the U.S. taxpayer. But China doesn’t want our debt. And Japan doesn’t want our debt. And Saudi Arabia doesn’t want our debt. Do Americans want to hold it all? Not really… So… all that debt — that space — between the black line and the red line represents the debt that will need to be held by someone else if the public can’t bear it… And there’s only one more trick left. The Federal Reserve. The Fed had planned to cut its balance sheet to around $7 trillion this year before its magic liquidity trick with regional and community banks in March. But based on the current trends, I expect the Federal Reserve to start building up its assets and push past $10 trillion in the coming years. And they’ll likely go higher from there - much like other central banks around the globe. I haven’t even proposed the Fed’s required “inflation targeting” to address the likely deflationary impact of artificial intelligence, the forward five-year shift of e-commerce after COVID, and other technology in the future. Central bank assets are most likely going higher. And that will send equity markets higher over the long run, too. As a result, we’ll witness the ongoing “Japan-ification” of the economy: low growth, low inflation, and increasing debt. It’s already buried in our government projections. You just have to find them. The real question is… do you even want to know? Looking ahead, the equity markets are your best long-term hedge against inflation on [top of a balanced portfolio]( other assets like Gold, Bitcoin, and other non-U.S.-denominated assets. We’ll dig into what a proper portfolio should look like next week. Stay positive, Garrett {NAME} Secretary of Defense Invite your friends and earn rewards If you enjoy Postcards from the Florida Republic, share it with your friends and earn rewards when they subscribe. [Invite Friends](   [Like]( [Comment]( [Restack](   © 2023 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()