(The Economic Collapse Blog)—For decades we were warned that someday our politicians would push things too far. We were warned that someday our national debt would spiral out of control, servicing that debt would become extremely oppressive due to soaring interest rates, existing bonds would crash thanks to the shift in interest rates, and foreign sources would start stepping back from buying any new debt that we would be issuing. Unfortunately, that time has arrived. The government debt crisis that we have been warned about is here, and it is going to be incredibly painful.
At this moment, our national debt is sitting at $33,836,693,993,860.35. It is probably going to hit 34 trillion dollars by the end of the year.
To put this into perspective, when Barack Obama first entered the White House we were about 10 trillion dollars in debt.
We are literally committing national suicide, but for a long time most Americans didn’t really care because we were not experiencing any serious consequences. But now the party is ending.
Thanks to rapidly rising interest rates, U.S. Treasury bonds “are in a bear market worse than the dot-com bust and almost as bad as 2008”…
Elementary economic forces — too much supply and not enough demand — have collided to create the worst stretch for U.S. government bonds since the Civil War. The government keeps borrowing to cover its budget deficits, while once-reliable buyers of that debt, both at home and abroad, have pulled back.
The result: Investors are demanding the steepest yields since 2007. Auctions of fresh bonds that were once routine are now going terribly. And bond portfolios are getting absolutely hammered. The longest-dated Treasury bonds are in a bear market worse than the dot-com bust and almost as bad as 2008.
A bond crash normally precedes a stock market crash.
That is exactly what happened in 2008, and it appears that the same pattern is being reproduced now.
So if you have a lot of money in the stock market, you may want to brace yourself for what is ahead.
In the past, we could always rely on China, Japan and other foreign buyers to keep the party going, but now they are not very interested in our bonds…
China and Japan, once reliable buyers of Treasury bonds, have been selling them to prop up their weakening currencies. A decade ago they held more than 22% of U.S. government bonds; today it’s 7%.
The Ukraine war has dampened demand among Eastern European buyers, said Steve Ricchiuto, the chief U.S. economist at Mizuho. Increasing U.S. oil production means fewer petrodollars in the Middle East to be reinvested through the Treasury market.
U.S. banks, too, are stepping back.
I certainly can’t blame our banks for “stepping back” from buying more bonds.
Thanks to the dramatic shift in interest rates that we have witnessed, they are sitting on hundreds of billions of dollars in unrealized losses.
So who is going to buy our debt in 2024 and beyond? That is a very good question. And servicing the debt that we have already accumulated is becoming a major problem.
During the last year, the federal government “had to spend one-fifth of all the money it collected just on debt interest”…
The U.S. federal government has borrowed so much money that, over the past year, it has had to spend one-fifth of all the money it collected just on debt interest—which came to almost $880 billion.
Americans paid some $450 billion less in income taxes for the year, trapping the government in the pincers of a fiscal crunch.
The country teeters on the brink of a debt spiral that could devolve into a fiscal crisis or hyperinflation, several economists told The Epoch Times.
“The problem is serious because, any way you cut it, taxpayers are paying interest on the mountain of debt that has been accumulated,” said Steve Hanke, a professor of applied economics at Johns Hopkins University. “In short, they are paying something for nothing.”
In 2024, the U.S. government will spend well over a trillion dollars just in interest on the national debt.
That wasn’t supposed to happen until 2030.
A day of reckoning has arrived, and it is just a matter of time before the entire system comes crashing down like a house of cards.
This isn’t going to be just another “financial crisis”. As James Rickards has aptly noted, what we will soon experience will be “qualitatively different” from anything that we have ever experienced before…
The next financial crisis will not be merely a bigger version of the 1998 and 2008 crises, it will be qualitatively different. It will encompass multiple asset classes on a global scale. It will exhibit inflation not seen since the 1970s, insolvency not seen since the 1930s and exchange shutdowns not seen since 1914. State power will be summoned to contain panic.
What Rickards is describing is a full-blown economic collapse.
So what will our society look like once such a scenario unfolds?
Already, economic conditions have deteriorated so dramatically that demand at local food banks has risen to “unprecedented” levels in some cities…
The demand for local food banks is on the rise as soaring prices impact average Americans under President Joe Biden.
The increasing demand for food banks demonstrates how soaring inflation driven by “Bidenomics” negatively impacts lower income families.
“We are seeing unprecedented demand,” Jackie DeCarlo, chief executive of Manna Food Center, told the Washington Post on Monday.
If things are this bad now, what will we be facing a year or two from now? At this point, there is no escape.
All our politicians can do is to keep the party going for as long as they possibly can. They knew that they were destroying our financial future, and they also knew that they couldn’t keep borrowing and spending insane amounts of money forever. Of course nobody can say that we weren’t warned.
People like me have been relentlessly warning about our financial condition for years, and now I am warning about what is coming in the aftermath of the approaching financial meltdown.
Our leaders tried to outrun the basic laws of economics for a long time, and for a while they were flying high. But now reality has caught up with them, and we are all going to pay a very bitter price for their crimes.
Sound off about this article and video on our Economic Collapse Substack.
Michael’s new book entitled “Chaos” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
This is a prime example of you can’t fix stupid. I have watched our politicians and big business run our country into the side of a mountain. It took 50 years but we have arrived at the disaster.