Total U.S. Public Debt & Interest Expense Hit A New Record High

The total U.S. public debt hit a new record high of $21.145 trillion on the last day in May.  As the U.S. debt increased, so did the interest expense which jumped by more than $26 billion in the first seven months of the fiscal year.  That’s correct; the United States government forked out an additional $26 billion to service its debt (Oct.-Apr) versus the same period last year.

While the U.S. debt reached a new high on May 31st, it took nearly two months to do it.  Let me explain.  During tax season, the total U.S. public debt actually declined from a peak of $21.135 trillion on April 10th to a low of $21.030 trillion on May 1st.  Since then, the U.S. debt has been steadily moving higher (including some daily fluctuations):

If you spend some time on the site, you will see that the total public debt doesn’t go up in a straight line.  There are days or weeks where the total debt declines.  However, the overall trend is higher.

Now, a rising debt level impacts the interest the U.S. Treasury must pay on this debt… especially when the average interest rate also increases.  According to the, the interest expense rose from $257.3 billion (Oct-Apr) 2017 to $283.6 billion (Oct-Apr) this year:

As I mentioned, the U.S. government paid an additional $26 billion to service the debt than it did last year.  Now, $26 billion may not seem like a lot of money these days, but it could buy the total global Registered Silver inventory:

Thus, the extra $26 billion paid by the U.S. Treasury to service its debt would have purchased the 1+ billion ounces of silver held in the COMEX (270 million oz) and all the Global Silver ETFs.  And, this would include the 138 million oz of silver supposedly stored at the JP Morgan vaults.

However, with the remaining $10 billion ($26 billion minus $16 billion), the U.S. government could have also purchased all the Silver Eagles minted since 1987.  According to my figures, the U.S. mint sold over 510 million Silver Eagles from 1987-2018.  If we give a value of $20 for each, that would be roughly $10.5 billion.

And remember, this is just the ADDITIONAL interest expense paid from Oct-April to service the massive U.S. public debt.  If interest rates continue to stay the same or rise for the remainder of the fiscal year, the U.S. government will likely pay between $45-50 billion more in 2018 to service its debt.

Lastly, I am quite surprised by some of the analysis coming from the precious metals community.  I will be writing about this at length in a new article, but it’s quite frustrating to see precious metals analysts totally disregard energy in their work or change the facts to promote a certain ideology.

For example, Bix Weir recently posted a new video on the “10 Reasons to own Silver.”  While I agree with some of the reasons he states to own silver, I was quite stunned to see Mr. Weir state in his 8th Reason was due to a 1/1 Ratio of Gold to Silver.   Bix remarked that there were about 6 billion ounces of above ground gold and silver, so this One-to-One ratio meant that silver was undervalued.

I get it.  However, Bix has been claiming that the world has millions of tons of gold in the world.  But if he states there are 6 billion oz of gold above ground, that is roughly 187,000 metric tons… a figure that I have reported to be accurate for several years.

So, which is it??

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36 Comments on "Total U.S. Public Debt & Interest Expense Hit A New Record High"

  1. Thank you Steve

    • george washington said that if the united states went to apaper money system the country would crash. please go to a-z quotes and look up washingtons quotes on paper money he signed the constitution and it says that only gold and silver coin shall be used as a legal tender act 1 sect 10.washington hated paper money and would be disgraced if he knew he was on the dollar bill

      • Sadly George Washington is thought of as a toothless buffoon by those that bother to even think of him today. Once described as the, “Indispensable Man” who was ‘First in war, First in Peace And First in the hearts of his countrymen’ the Capitol that bares his name was at first called “The City of Washington.” It is my thought that George Washington is the most significant historical figure in the last 500 years….for had there been no Washington there would have been no Lincoln, no D-Day…and right on down the line you can go. Truly, 90 freaking years/three full generations w/no one alive that had ever seen Washington, the 42 State admitted to the Union was named after him; Oh, how the history books have been re-written in a disgraceful, even maliciously evil manner.

    • mr rocco please call me at 7603314328 warren amm FDR took all george
      r washingtons journals and writings out of our school books and libraries so he could put in his socialist agenda.George Washington keep a journal for every day of his life and no american has ever read it

  2. The U.S. debt will never be paid back…ever. The system it not designed that way.

    U.S. debt must continue to rise to infinity for the functioning of the global financial system, since dollar denominated debt is the international reserve.

    At some point the system may just reset, and the U.S. will need to firewall all of the outstanding debt, or hyperinflate. Then it will just issue another currency and a new round will begin. By that point we may have a world war and American civil war.

    After that, life in America will be brutal and short. Standards of living will drop 50% or more. If you thought there were no go zones, you haven’t seen anything yet. I’m talking rioting and and mad max, every year, permanently. The country itself may split apart into separate entities.

    Gold and silver have little to do with any of this.

  3. Paul D Anders | June 4, 2018 at 6:00 pm |

    Steve, I agree with you, but energy will only be an issue when it is an issue. Until then it will not be an issue in pricing.
    One day the earth will cool enough that there will not be a center ball rotating that gives us a magnetic field protecting us from the suns radiation…but until then, it’s business as usual…
    I’m as frustrated as all of you here trust me.

  4. MASTERMIND | June 4, 2018 at 6:04 pm |

    Government Intervention is triggered by a Keynesian belief that aggregate demand can be increased by lower interest rates and by increasing government deficits thereby somehow spurring economic growth. Debt grows faster than income growth and eventually has to be restructured, i.e., everyone loses in the end. Since 2007, global debt has grown by US$57 trillion and it’s had disastrous results. Greece, Detroit, Puerto Richo, Venezuela are just the beginning of this trend. Soon, it will be followed by larger countries like China and United States.

    ‘WORSE THAN 2007’: Top central banker warns of looming wave of worldwide bankruptcies

  5. Interest on Debt: $283.6 billion, 500 by 2020?

    But this one gives me the warm fuzzies, Federal Pensions: $262 billion.

    Poor silver is clamped down for how long? The stock market tech is back on fire, Apple almost worth a trillion. The Atlanta FED predicting 4.7% GDP growth coming. It’s time for celebration, not worry about the debt, Congress.

  6. Brant, the Atlanta Fed was predicting 5% gdp growth in the first quarter and it was only 2 something. These central bankers have no clue what the hell is going on or to what degree the collapse will be that’s coming!

  7. Petedivine | June 5, 2018 at 9:52 am |

    Steve’s article only addresses public debt. That’s just one piece of the U.S. debt equation. Total outstanding consumer debt which includes credit cards, student debt, and vehicle loans is around 3.8 Trillion dollars. This doesn’t include securitized mortgage debt.

    It gets scarier when you break down the debt by household
    credit card debt = $16,883
    Auto Loans = $29,539
    Student loans = $50,626
    Cost of living has increased 30% over the last 13 years.

    Between household debt, housing debt, and taxes its a wonder we have any money left to save. You know for retirement or for a rainy day. After reading Steve’s work and looking at the inflation numbers, the idea of a 401K seems so inadequate. Assuming of course that you can actually contribute to a 401K or Roth plan after your monthly financial obligations. My retirement horizon (age 67) is 17 years away. What will the Dollar look like in 17 years? What will Dollar derivative investments such as stocks and bonds look like? These are important questions, because if I choose incorrectly my retirement will be a short affair. Tough questions and not too many good solutions.

    • DisappearingCulture | June 5, 2018 at 2:29 pm |

      17 years from now? Half of the people posting here will be lucky to be alive, regardless of their current age.
      See if you can secure a 2nd residence in another location, maybe another country that is less likely to be a player in a world war, that has lots of food [warm; near ocean], and bury lots of small denomination coins there.

    • Praps,

      Not really. Take a look at the LONG-TERM CHART (MAX setting) on that Page on Trading Economics. The Debt to GDP is nearly as high as what it was during WW2.


    • Prosperity to gdp ratio is what counts. Adding $5,- in debt to achieve $1,- in gdp is called suicide. And why so much debt? Because we ran out of affordable energy to make things grow. Now we’re pumping illusions.

    • US debt is very low. It can triple without any real issue.
      The west (namely USA) is full in charge. All others are just a bunch of complete clowns…

      • DisappearingCulture | June 6, 2018 at 3:29 pm |

        One of your classic moronic statements. How does the U.S. pay the interest on that much larger debt?

        • Simple : by creating more debt via the Fed like Japan has done for 25 years.

          Indonesia are now crying about the 2% fed funds : still waiting news from the petroyuan dreamers…

          • DisappearingCulture | June 7, 2018 at 4:17 pm |

            Right now the U.S. debt isn’t widely discussed in the media; certainly not with the inclusion of the statement, with certainty, that the current debt can never be paid back…and ensuing discussion of what that means. I bet the majority of people think it can or will. If that becomes a topic of discussion during/on top of the coming recession, it is a confidence issue. And feelings drive the economy…and officials ability to stay in power. Not just politicians.

          • DisappearingCulture : US, japanese, european, and soon chinese debts will never been repaid… Why on earth suffering uselessly in the meantime ?

          • RD, the debt won’t be repaid indeed. They will monetize it. Its already happening. That, in the end, will blow up fiat currencies because they become worthless. So, debt is not the problem, diminishing returns in monetizing the debt is the problem.

            This is a rather good comment from Tim Morgan about our future:

            “”It might help if I set out my own view on how GFC II happens (this article is mostly about why).
            Like GFC I, GFC II is likely to start with risk-aversion, a phase that has now commenced.

            Then, again like GFC I, we get a debt crisis, though this time there will be concurrent risk to some fiat currencies, most obviously in the Euro Area, perhaps GBP, and some EMs.

            The authorities then unveil QE on a huge scale. This time is different, though. First, there’s no scope for cutting policy rates (let’s leave NIRP out of this for now, to avoid complication).

            Second, the aim of QE in GFC I was to slash yields (the market’s interest rates) by buying bonds in large amounts. This time, QE will be used to monetise debt, a straight swap of newly-created money for the debt of distressed borrowers. This is fundamentally different from the market operation that was QE in GFC I.

            Now there are two new problems, not encountered in GFC I. The first of these is that voters won’t acquiesce, and some opposition parties will join with “populists” in committing to scrap the plan.

            Then, out of this melange emerges a breakdown of faith in fiats. If people can borrow, then get out of trouble by being handed what (by this time) will be perceived as “funny money”, then the credibility of fiats takes a blow from which it is unlikely to recover.

            This will be compounded by toxic contagion in the financial system. Countries whose banking systems (as measured by financial assets) are too big will be left with holes that cannot be filled using QE without destroying faith in the currency.

            For instance, take a country wih financial assets at 1000% of GDP. If 10% turn toxic, filling the gap would require creating QE equivalent to 100% of annual GDP. In principle, this is tantamount to almost doubling the money supply. Try anything like this and the currency is toast.

            I’m still working this through – one reason for no article on it just yet – but this outline is what I think the scenario looks like.””

          • Some interesting stuff brought by this article but I still think the author took it backwards in swapping cause for consequence.
            Fiat has now come out of nowhere and has not an autonomy per se the global organization of the societies considered. There is not a choice like cheese or dessert in a restaurant which to be chosen by a precise person.
            If he does not wonder why gold as a money merchandise has dissappeared from the whole earth, tere might been a reason.
            It is not fiat whhich is in crisis, it i the whole actual capitalism development.

  8. “There is nothing inherently permanent or valuable in “money” printed by central banks or governments; they are nothing but fast-accumulating claims on a diminishing supply of future energy.”

  9. The USG IS HYPERINFLATING right now. They are controlling where the excess $$$ is going.
    Real Estate-YES
    Gold and Sliver-NO
    Cryptos-hmmmm looks like they are losing that war…….they are trying to keep $$$ out but can’t control the entire sector. Look for the crypto sector to bust wide open and expose the hyperinflation that the precious metals would normally expose. After that, then the metals ramp up. Tag Team action…….

    • As an individual, you can skip a few lattes or trips to the beach, and accumulate a few Dolloros to bring to a local coin dealer. It is a temporary blessing to be able to buy finished coins for about the price silver mine owners bring silver to market at. Silver has a place in every plan to accumulate wealth for the distant future, after building a stash of food/fuel/cash/ammo that might last you half a year of troubles. What if you could assure food for your children for a year by having a silver dime per day for each child in a collection? It’s cheap insurance (90% small-coin silver at a penny over spot per coin in the case of pre-1965 dimes!) that you could make a few Dollars or NewDollars on if not needed in a collapse situation.

    • It is possible IMO that cryptos will enter a new bull market phase which is going to syphon trillions of dollars and exploded right after.

      • DisappearingCulture | June 7, 2018 at 7:50 am |

        When the next recession hits the vast majority of the over 1,800 cryptos’ value will go to zero or near zero; most of the rest will take a big plunge in value. But that could happen just due to governments clamping down on them. It’s amazing how naive people are…thinking central banks & governments have no control over competing currencies. They believe central banks will control the price of gold & silver ad infinitum [actually they will while the COMEX exists] but also believe those same entities are powerless to have much effect on an “electronic” competing currency.

    • By the way I can contemplate AAPL reaching the 1 trillion mark the day the fed will announce a new rise of the fed fund rates and the COMPLETE triumph and victory of the globalists and central bankers.
      Nasdasq has now broken out, so a doubling FAANG is now in the cards.

  10. And what about this?? we are dealing with biggest Crooks. They experts in fooling and stealing.

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