Summary
- Deficit to outlay ratio tops 60%, above the hyperinflationary threshold of 40%.
- Q2 2020 GDP shrank 31.7%, but will improve in Q3 2020.
- Delinquencies are on the rise on record high corporate debt.
- U.S. dollar will lose value due to ultra-low interest rates and QE.
- Gold is the only safe haven.
The U.S. is about to embark on a very ominous journey into hyperinflation with record amounts of debt and deficits.
The latest Q2 2020 budget deficit numbers for the United States have been released, and they don’t look pretty.
Federal government expenditures (annual rate) have ballooned to $9 trillion while federal government receipts (annual rate) have dropped to $3.5 trillion.
This has resulted in an annually adjusted budget deficit of $5.5 trillion, which is shown in the chart below. This is completely unprecedented, and it doesn’t look like the expenditures are going to ease down as many businesses (airlines, event sector, hospitality industry) still struggle due to the pandemic.
Source: Katchum | Seeking Alpha
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