Economic Shock: Bombshell GDP Drop, IMF Slams Congress Spending, Republic Bank Collapses

Economic Shock: Bombshell GDP Drop, IMF Slams Congress Spending, Republic Bank Collapses

all right guys so the US economy is in
trouble and the dollar is taking down
Global currencies and all this stems
from the FED keeping interest rates high
and why is this because inflation is
still a persistent problem we are
witnessing a snippet of the end game
where the US economy is starting to lose
control where deficit spending doesn’t
move the needle anymore and stagflation
is here to stay core inflation in the US
has risen once again in March which is a
big problem inflation came in rate hot
hitting 0.3% in March spending is also
up reaching half% as well households in
the US they spending more than the
estimates and to power this looks like
the economy is booming this isn’t really
good for the FED they know the economy
is in trouble the big problem is the
high interest rates the FED funds
staying at
5.5% is starting to smash the global
economy into pieces now you compound
this with endless government spending
from Joe Biden is a recipe for disaster
a hot Landing could sneak up behind us
if we look at the markets they’re
expecting the first card to only happen
in December that’s at least 6 months
away guys and the total card might only
be 33 basis points and this means we
could be well above 5% by the end of
2024 this opens up a whole can of worms
especially when the US government has to
keep borrowing money by Biden has no
choice but to keep the gravy train going
all the way to November and that’s bomic
for you for the April to June quarter
this year the US Treasury will be
borrowing over $200 billion in debt but
let’s not forget about the $95 billion
for Ukraine Israel and Taiwan and it
adds up everything to 300 billion that
money will have to be borrowed into
existence as well is this endless
issuance of debt that’s going to trap
Janet Yellen because rates are stay High
the more she borrows the bigger the hole
she’s digging everyone into she’s trying
to juggle dep issuance between the
longer term bonds and the shorter term T
bills and for a while this was working
now the idea is to borrow more
short-term debt because it matures
faster and the fact was supposed to cut
rates down right is supposed to happen
by now the risk would only be shortterm
but that’s not the case anymore power
can’t afford to cut anytime soon
treasury yelds across the board are Hing
up the 2year is at 5% the 30-year is at
4.8% the 10 year is above
4.7% no matter which type of bond the
treasury issues they are screwed more
Capital will leave the real economy
they’ll just hide in treasury bonds and
this will make the global currency
crisis worse now higher rates put more
pressure on us companies it will also
push the US debt crisis to Unthinkable
levels now you would think that deficit
spending is great for the US economy you
borrow more money today to generate GDP
growth tomorrow but as we said many
times here the money borrowed isn’t
being used productively the cash is
being sent to fund endless Wars it is
diverted to the military industrial
complex it’s not being used to create
real economic growth now if you borrow
$1 you kind of expect to get a return of
at least a dollar or more but that’s not
really the case the Congressional budget
office projects the US deficit to hit
$1.5 trillion this year and this 1.5
trillion borrowed from Global Investors
to prop up the US economy and this
deficit is equivalent to 5.3% of GDP and
in 2023 last year the deficit spending
was around 6.3% of GDP you would expect
GDP growth to match the increase in
deficit spending at least to match it
however the economy is off to a very bad
start this year the US economy slows and
inflation jumps dampening soft Landing
homes GDP for q1 has grown by only
1.6% slower than all the estimates
economists were expecting the US economy
to grow by 2.5% but it’s almost a full
percentage point away now what’s scary
is the trajectory of economic growth for
the past three quarters since Q3 last
year GDP has been dropping quarter after
quarter from nearly 5% down to
1.6% this is a steep drop that is
signaling trouble ahead and this is
coming when Biden is boring endless am
amounts of money to prop things up so
why is this happening and it’s quite
simple spending isn’t being done
effectively productively the money isn’t
used to grow the economy where it
matters a ton of money is used for
interest payments on the existing debt
the interest of the national debt has
now ballooned to $1 trillion in 2023 and
this amount will only grow as the fat
refuses to cut rates and this is the
problem with endless deficit spending at
higher interest rates the money borrowed
is used to service the existing loan it
eats up capital and prevents growth in
the real economy and this is something
many people refuse to talk about yes
Biden can keep the borrowing up but that
doesn’t mean GDP will grow
correspondingly this stimulus is already
starting to lose effect higher rates
don’t just impact the national GDP it’s
starting to crush households as well we
can see a big U-turn in consumer
spending especially from the poor and
the middle class the net interest income
for households have gone down in this
hiking cycle and this confirms our worst
fears the debt cost for people have
risen more than their interest income
the interest income from higher bond
yields is nothing compared to the
interest payments people need to pay the
net interest income for us households
have collapsed this hiking cycle now if
rates went from 0 to 5.5% shouldn’t
people be earning more from their bond
Holdings why has the income fallen from
900 100 billion to
670 it’s because people’s liabilities
have grown even bigger mortgages are
armed and credit card debt is flying to
the moon and this is the double whing of
stagflation people are truly facing
prices are up households have to spend
more so they just go around swiping the
card and that traps people in an endless
dead cycle and the longer this continues
it threatens to creater consumer
spending and all this is traced back to
wasteful spending from Congress and you
would think that Economist like Janet
Yellen kind of understand this right she
should be telling the US government to
stop deficit spending but she’s still
living in fantasy land she’s operating
in the Twilight Zone according to her
the US can bring inflation down without
hurting jobs and I kind of disagree not
at the rate Congress is spending the
further discontinues the longer rates
will stay high in the US and this will
hurt companies and consumers spending
both at the same time and all that will
bumerang back on American job sooner or
later and guess what even the IMF is
scolding Congress on this the IMF is
warning that the US deficit will POS
significant risk to the global economy
and to be fair the IMF also scolded the
UK China and Italy as well but the US
has an outsized effect on the World by
2025 the IMF projects the US deficit to
hit 7% of GDP now if you look at India
and China they borrowing more than the
US so what gives why why is the IMF
picking on the US now firstly China and
India’s GDP growth rate is much higher
than the US secondly most of their debt
is domestic while US debt is more
globally held but most importantly these
two countries they don’t own the world
Reserve currency but the US does they
hold the power of the dollar they have
the One Ring the IMF says spending from
Congress has increased core inflation by
0.5% and that in turn will cause rates
to stay higher for longer this isn’t
just a problem for the US it’s a big
crisis for the world economy and here’s
why the dollar is the reserve currency
everything is points in dollars so when
it strengthens Imports for countries
outside of the US are more expensive and
when the FED keeps rates High it vacuums
money away from the world into US bonds
investors realize that they can get over
5% in US bonds so they dumb their local
currencies to buy dollars to invest in
treasuries and that’s sense the dollar
higher and crashes currencies all around
the world is a chain effect but it isn’t
just an inflation problem it can destroy
Global growth as well and all boils down
to higher interest rates back in the US
a 1% spike in US rates leads to a 90
basis points rise in advanced economies
for emerging markets the rise is 1% as
well so everyone suffers when the US
keeps rates higher and this is exactly
the situation happening today a great
example is the Japanese Yen because
yields in the US are over 5% while in
Japan they under 1% this causes money to
leave the Japanese Yen the selloff isn’t
done yet the currency has weakened above
previous intervention levels is now 158
Yen to the dollar Imports to Japan are
now more expensive people have to pay
more Japan is example of a country that
is no choice but to watch their currency
collapse because of their own debt
crisis they can’t raise rates to counter
the fed the only option left is to watch
the Yen get devalued and this is
happening globally not just in Japan
currencies and economies are getting
clobbered and that’s why the IMF is
sounding the alarm America’s deficit
spending is hurting other countries and
the pain isn’t over yet now the problem
goes beyond just the slum in GDP it goes
beyond High inflation on Main Street and
even Global currency crisis higher rates
are starting to collapse US Banks once
again with we have a new bank failure
today Regulators have taken control of
Republic First Bank and this is the
first US Bank crash this year in 2024
and it’s a story of how higher rates are
destroying the balance sheet and here’s
how bad the damage was there are total
equity which is assets minus liabilities
fell to $96 million but because they had
260 million in Mark to Market losses on
their bonds the bank is broke they’re
effectively underwater the bank was
worth negative now this isn’t a huge
entity like svb their Assets in total
were only around $6 billion but it does
highlight how higher for longer is
destroying the assets of banks how we
can really drive them towards bankruptcy
when yields go up everything from
treasury bonds to real estate loans
start to fall in value and if it falls
enough the bank is finished now what’s
the good news depositors didn’t lose the
dime but it doesn’t mean the next Bank
collapse will be that lucky depositors
could lose money this time and it’s why
we keep talking about gold on this
channel right it’s crazy not to have
some and let’s understand the scale of
the problem US Banks have a ton of
unrealized losses on their books at the
end of last year they were $600 billion
in the rate and these are paper losses
just waiting to be exposed it’s
essentially a ticking time bomb that
could explode the longer power refuses
to C and what’s frightening are the
paper losses in rate those are the held
to maturity of HTM bonds that under
water now their Banks expect to hold
these bonds until they mature and they
could be for the next 5 10 or even 20
years but there’s a big problem here if
the crisis gets bad enough and the banks
need to sell those bonds a big repricing
will happen for some banks the losses
could Eclipse their overall assets which
means bankruptcy now if depositors run
away or if other parts of their
portfolio implode like commercial real
estate then we are in big trouble the
bank will be forced to sell and realize
the losses their books could literally
explode and this is the risk of higher
rates it makes the entire economy built
on Leverage extremely shaky so until the
FED starts cutting their systemic risk
in the system this is the black one risk
from the US banking sector let’s put
things in perspective the banking
collapse last year totaled over $500
billion that’s 200 billion more than the
failures in the’ 08 crisis that’s how
severe things were and because of
inflation the fat can’t cut rates for
quite a while a lot of nasty things
could happen from now until the first
cut it might only happened in December
and by then even cutting rates might be
too late to save the system so we are in
a very serious situation us deficit
spending is not efficient anymore
inflation is still high but to prevent a
collapse borrowing simply can’t stop we
are moving closer and closer towards
stagflation now Economist ran a million
simul ations on the US government debt
and guess what they found 88% of the
test showed the debt to GDP is on an
unsustainable path eventually we will
reach a point of default either the US
government can’t physically pay the debt
or they will just print money and
devalue the dollar and as Biden
continues to borrow tons of money at
higher rates he’s pushing us dangerously
closer towards the end game and by 2050
the interest cost on the debt alone
might hit 6% of GDP P 6% of the entire
US economy the value created there will
be used to pay just the interest
payments on the debt alone and that is
by definition unsustainable oh Sean is
fear mongering again guys this isn’t
fear mongering it’s pure mathematics if
you want to save the US economy and by
extension the world we need to stop
spending and the first step is to stop
the two Wars happening today the
financial black hole and the endless
borrowing has to stop but let me know
what thing is the IMF right about the US
deficit crisis and are more banks on the
verge of collapse let me know in the
comments below stay safe be sure to
smash the like button and subscribe as
we navigate through these insane times

Despite huge deficit spending, US GDP has fallen down to 1.6 percent in Q1. This should be alarming as the endless borrowing can’t seem to prop up the US economy. The IMF is scolding the US Congress for their spendthrift ways, highlighting how this is putting the global economy at big risk. Meanwhile, Republic First Bank has collapsed in the US, signalling a resurgence in bank failures thanks to higher interest rates. Here’s what you must know!

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✅ Timestamps & Chapters:
0:00 US Inflation Crisis Not Over
2:56 US GDP Falls Hard
6:29 IMF Slams Congress To Stop Spending
9:47 New Bank Failure Erupts
12:42 Stagflation Future

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