The U.S. Treasury publishes its balance sheet annually. The most recent, for fiscal year 2020, is so egregiously out of whack it might be hard to wrap your head around:
Total Assets: $5.95 trillion Total Liabilities: $32.74 trillion Net Position (total assets minus total liabilities): -$26.80 trillion
All figures above have been rounded to the nearest billions. The net position also factors in -$3.1 billion in “unmatched transactions and balances,” which is odd. (Looks like everybody has a little trouble balancing the checkbook…)
But the obvious focus? Liabilities outweigh assets more than five to one.
How will the U.S. government try to correct this imbalance? It’s almost certain they will use one of the only tools they have: inflation.
In fact, the latest official inflation numbers have come in, which continue the trend of rising price inflation (see chart):
Unlike the Fed, which likes to focus your attention on what Wolf Richter calls its “lowest lowball inflation measure” that ignores important prices, the BLS chart includes food and energy.
That’s bad enough. If, however, we use the same measures the Federal Reserve employed in 1990 like John Williams of ShadowStats does, the picture gets a lot worse:
July PPI Surged to New, Historic Extremes
Tempered by Unusual Factors, July CPI-U Held at 13-Year High for a Second Month, Just Shy of a 41-Year High
ShadowStats Alternate CPI Held at Its 41-Year High
Don’t let the name “ShadowStats” fool you. These numbers are based on the Federal Reserve’s own historic metrics that were retired in favor of the current, less-alarming measures.
Inflation is bad, and it doesn’t seem likely to get better any time soon…
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