The Debt Ceiling Crisis is Bad | Just 7 Days Left.

it's essential that the debt ceiling be

raised in a timely way so that the U.S

government can pay all of its bills when

they're due failure of the United States

to honor all of its debt would call into

question our credit worthiness financial

and economic chaos would ensue we

potentially face an economic and

constitutional catastrophe which United

States 21 days away from a default on

the horizon and just two days away from

the expiration of the coupon code linked

down below big price increase coming in

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a default could destroy the United

States dollar Elevate China's Yuan to

the reserve currency status of the world

Elevate the partnership between China

and Russia and China and the Middle East

with countries like Saudi Arabia and

Iran it could destroy the United States

perfect credit history that the United

States so gratefully and effortfully

enjoys and it could plummet the stock

market leading to a disastrous crash not

even Jerome Powell could save us from

the bond market could collapse leading

to a skyrocketing of interest rates and

unemployment the likes of which we have

not seen in the last 100 years all of a

sudden the United States debt which is

the only asset that's deemed risk-free

would become a risky asset not only

could our government a shut down leading

to Veterans not receiving pay those on

Social Security and Medicare wondering

if they're going to get paid while

individuals working for the federal

government like those on our border or

those at our parks are off work without

pay leading also to questions of will

TSA continue to be able to operate and

will our economy come to a halt as

planes are unable to fly because the

government stops paying its bills is

this all just recklessness because

ultimately the government should be

balancing a budget why after all do we

have a budget bill that we pass and we

authorize temporary tax cuts that end up

becoming permanent or temporary tax

incentives that end up becoming

permanent all only to end up having the

negotiation again when it comes to the

debt ceiling if we want to stop spending

so much money why don't we do so when we

go to swipe the credit card stop swiping

the credit card and maybe be a little

bit more logical with your spending

rather than complaining when the credit

card bill comes in but then again logic

is very rarely used in Congress because

it just doesn't get you votes logic

instead is what we like to use on this

channel which is why hopefully you

subscribe to the channel and it's of

course what we use in our course member

live streams every day for example

people when we analyzed palantir

yesterday with the following to say

analyzing the low volatility the low

expectations for earnings and the

Monstrous balance sheet that palantir

has with some phenomenal numbers all

which led into earnings shooting the

stock up over 20 percent here's that

clip from the course member live stream

which you should consider being a part

of this company is not going anywhere

they are not going anywhere they are so

fat padded holy crap the volatility on

the 10-day averages in the toilet for

palantir average movement after one day

14.2 percent today's implied one day

movement

5.5 percent

that's below my seven percent which

means could be could be worth a YOLO

call but the point is a spending gets

votes it's why it was so easy for both

Republicans and Democrats to spend money

on stimulus and unemployment pay during

the pandemic it's also why you have

people like the governor of California

able to spend money like a drunken

sailor providing stimulus checks to

households making up to five hundred

thousand dollars as recently as seven

months ago while we were in a time of

some of the worst inflation in the last

40 years and now all of a sudden the

government of California is defaulting

on 20 billion dollars of money they

borrowed from the federal government

yeah California defaulting is actually

contributing to this debt ceiling crisis

that we're all now as Americans saddled

with so in part you can blame California

again for not paying their bills and

Governor Newsom wants to continue to

send stimulus checks to households

making up to five hundred thousand

dollars while at the same time force

small businesses and business owners to

make up the losses that the state can't

properly manage but ignore California

for a moment and let's focus on the fact

that the Speaker of the House Republican

Kevin McCarthy and Biden are just now

having their first meeting in three

months to hopefully discuss what options

there are to avoid a devastating default

and those options are exactly what we've

got to talk about now because while on

one hand people say hey look maybe

artificial intelligence will lead to a

productivity boom and the debt that we

have outstanding today will end up

becoming a small amount of our future

budget

optimists say hey

even in the optimistic scenario that our

GDP does explode our economy blows up in

a great positive way and this debt

becomes irrelevant over time

we'll probably just end up spending more

money and being in the same situation

once again this is why we've raised the

debt ceiling 78 times since we created

the debt ceiling in 1917. that's right

we've been through this 78 times before

and we've always extended it but today

people say this time is different

because 55 percent of Republicans don't

want the debt ceiling to be extended and

ultimately Congress has to do what the

American people want and Americans are

frustrated that we can't balance our

budget that we're on this unsustainable

fiscal path so what are the options

going forward well here they are there

are 10 options option number one is

declare the debt incompatible with

spending laws this invokes something

known as the later in time rule which

basically says Ah the 1917 law is old

since we agreed to spend money by

swiping the credit card after 1917 we

need to pay the at and ignore the 1917

debt ceiling law option number two is to

use some Creative Accounting again which

is beyond what we're already doing and

we could buy back old bonds at a

discount it basically takes cash we have

today we buy back low interest rate

bonds at a discount and then we subject

ourselves to a higher interest rate on

new borrowing which we can now do since

we paid off some of our debt and what

we're really doing is increasing our

interest costs for the sake of buying

some time

not a great option either like option

number one which would probably just get

held up in courts and wouldn't go very

far would require an act of Congress

which puts us back to where we are now

option number three is asking for an

advance from the Federal Reserve but

many people say that's just debt and

that would not bypass the debt ceiling

so that leaves us maybe with option

number four which we've got 10 options

here not all of them are great but

option number four is a crazy one that

could work

but let's evaluate if it actually will I

do quickly want to remind you that

tomorrow we are indeed increasing the

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CPI day the most important one you want

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price and you get access to those course

member lives where we talk about things

like palantir or other fundamental

analysis so check that out or email us

at kevin.com for a bundle with some of

the investing courses so option number

four is the trillion dollar coin idea

the treasury via a 1997 novelty coin act

basically allowed the treasury to issue

novelty coins

and so this is where this idea came of

well maybe the treasury can just out of

thin air create a coin and then go

deposit it with the Federal Reserve so

think about this kind of like you

creating a 100 Bill and then going to

the bank and saying hey can you give me

five twenties here you go it's not

technically a loan because you're giving

them something that is worth a hundred

dollars now technically the bank might

look at your sticky note and go do that

in a hundred dollars and the FED could

do that the FED could reject the

trillion dollar coin in fact they've

alluded to rejecting the trillion dollar

coin idea and it would also change the

long-standing precedent that it is the

Fed that creates money out of thin air

and the treasury borrows it if the

treasury could just create money out of

thin air we might actually end up losing

even more trust in the US dollar than

we've already lost because now all of a

sudden you've got the FED creating money

out of thin air and the treasury

creating money out of thin air that

would be wild but it could in theory

happen the next option is option number

five which is using the 14th Amendment

which basically breaks the 1917 debt

ceiling law because the Constitution

would then say well and the Constitution

already says quote the validity of the

public debt authorized by the law shall

not be questioned you could combine this

somewhat with option number one where

you say look we signed this spending

into law after 1917 that is the time see

pieces and you could combine that with

the Constitution as a way to justify it

saying public debt shouldn't be

questioned like we should not default

that's an option and Biden could invoke

this though right now he says he has not

considered doing so although a lot of

people question what he has considered

doing

option number six is known as a

discharge petition this has worked twice

in the past in 2002 and 2015 this is

basically when Democrats force a vote on

a debt ceiling increase however

it would require five Republicans

joining Democrats those five Republicans

would likely be committing some form of

political suicide but it could be great

for a the country B Biden and Democrats

and see Kevin McCarthy because Kevin

McCarthy then wouldn't seem weak instead

it was five Republicans who were weak

but again convincing five Republicans

who are up for election every two years

in the House of Representatives to

commit political suicide is unlikely

especially since 55 percent of

Republicans do not want to see the debt

ceiling increase instead they want a

balanced budget which again the time for

a balanced budget is when we pass the

budget and pass individual bills not

when we've already spent the money and

now we're deciding not to pay although

the frustration is when Democrats had

control of the House and Senate and

administration they jammed bills down

the throat of Republicans Republicans

had no power to actually negotiate and

so Republicans are like look we're just

we're just giving it back to you like

y'all pass stuff when you had control

and you didn't give us a chance to

negotiate so now we're going to do the

same thing to you

tough because now we're gambling with

America and we risk the highest

unemployment we've ever seen in the last

100 years which would be bad

option number six is just kicking the

can down the road which has happened

many times before we basically just

extend the debt ceiling discussions

through September 30th or until the end

of the year uh September 30th is the end

of their fiscal calendar year which is a

fancy way of saying a different calendar

or just the end of the actual calendar

year December this has been done many

times before I don't think a short-term

extension does anything option number

seven is just pass a freaking extension

to the debt ceiling this is the most

hopeful option option number eight is a

government shutdown where veteran

payments and federal services like parks

and maybe the TSA shutdown option number

nine is suspend the debt ceiling

altogether

and then option number 10 is just the

nuclear option which is default this is

very bad you would want to check out my

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it out very bad though everything

plummets in value and you will not want

to own anything probably other than gold

in this sort of scenario

now of course that's not personalized

Financial advice for you even though I'm

a financial advisor just saying we have

to evaluate the odds of this actually

happening now none of these sound like

great options other than actually

passing the debt ceiling and we

certainly don't want to gamble with

American lives and employment

and even though everybody is frustrated

that we have an unsustainable government

expenditure path uh this is probably not

the time to try to solve every single

solution of all the spending that's

happened over the past few years

especially since we're in pretty dire

economic Straits right now we're either

in a recession or just got out of a

recession or going into a recession so

really for me I look at this debt

ceiling crisis as really good political

posturing it's a really good opportunity

for politicians to get on mainstream

media and get attention and show their

voting base that they're working hard

for their constituents But ultimately I

think

there's a 98 chance the debt ceiling is

going to get extended or we will kick

the can down the road and then we'll

extend it it's happened in the last 78

times we've never defaulted defaulting

would be disastrous I am not positioning

my portfolio in any other way whatsoever

I'm not buying gold I'm not at all

concerned that we are actually going to

default default is not an option America

is not a deadbeat Nation it is a great

way for the mainstream media to get

eyeballs it is trending on every new

source everybody wants to know what the

heck is going on everybody wants updates

on this but the reality is providing the

straight scoop that the reality is

nothing's probably likely to happen and

the debt ceiling is probably going to

get extended in fact the debt uh ceiling

X date of June 1st in 21 days might

honestly be a political trade anyway

Janet Yellen comes up with that at the

treasury Department and if she says the

X date you know other words the date

that we actually run out of cash we've

already technically hit the debt ceiling

but we play games and we haven't run out

of cash yet that X date might be later

but it's a perfect way to kind of

condense the negotiation and sure if you

look at the Congressional calendar you

look and say look we got 21 days left of

those 21 days left what do we have we've

got 15 sessions where Congress is

actually available of those only on

seven days is Congress both the house

and the Senate available the same day so

we have a very very

um let's say tight time frame but again

that tight time frame just gets more

eyeballs on mainstream media and it's

kind of what the media wants it's

exactly what politicians want and

ultimately

we're not going to default I can't

guarantee that obviously I just don't

see it happening I see this as political

posturing and jargon it's again a great

way to get views on social media for

politicians on the mainstream Media or

otherwise but this is going to get

extended like it has in the past if I'm

wrong which I could be then I'm going to

get financially punished but then again

so will absolutely every American and

that is absolutely stupid and

mind-blowing I can't imagine it

happening so that's my take on the debt

ceiling hopefully you found it helpful

check out the programs linked down below

and we'll see you in the next one

goodbye

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