Change in US Gross Federal Debt by Presidency (1790-2026) | Chris Martz

Something happened in 1971.

55 years of bankruptcy fraud.

US Treasury Secretary Bessent: "Sanctions Could Disrupt Global Finance!"

US Treasury Secretary Scott Bessent outlined "Operation Economic Outcast," a phased sanctions campaign targeting Iran’s cryptocurrency, technology, gold, aviation, and shipping sectors, while warning third countries to cut ties with Tehran or risk losing access to the US dollar. 

  

 Currency Collapse Indicator Model: US 2026 worse than Venezuela 2017. Ready for shock therapy?

» Scott Bessent looks to be intentionally crashing the $. I studied currency collapses and found that there were  7 indicators that preceded every major currency collapse in modern history. I then measured the US dollar against those 7. And as of right now, based on what Scott Bessent did last week, we have hit all 7 indicators. No country in modern history has met all 7 and avoided a currency collapse. None. And this doesn't look to be happening to us, it looks to be being done to us, by the people who swore an oath to prevent it. And they are getting rich while they do it. «

Scott Bessent—The Fox in the Henhouse.

He warned that "sanctions could disrupt global finance," arguing that a gradual approach gives nations time to end their dealings with Tehran and avoid broader financial disruption. His remarks drew mixed reactions, ranging from claims that they amounted to an "empire-level economic terrorist" admission to interpretations that they were simply a rhetorical push for compliance, fueling memes and debate over the global impact of sanctions.

» Why would I want to blow up the global financial system? «

Bessent's recent doubling of bond buybacks and sanctions have been cited as potential warning signs, alongside indicators such as high debt-to-GDP, declining reserves, and political interference, with charts comparing the US to historical cases. 

 

 "Let them eat white bread!"

The Reign of the Orange Ape—certainly one for the history books.

 

The US Dollar System.

 

Reactions split between alarm over a potential dollar squeeze—fueled by China's reduced Treasury holdings and increased gold purchases—and pushback emphasizing the dollar’s unique reserve-currency status and the subjectivity of such models. Markets have reflected the debate, with a weaker dollar coinciding with gains in gold and Bitcoin as concerns persist over the official $40 trillion national debt.

 

You don't grow your way out of debt when 

debt is outrunning growth every single year. 

 

Jerome Powell in February 2024, in a 60 Minutes interview

—and still not arrested... 'cause it's the land of the free.

 

Warsh will inflate the US debt away. It was clear

in February 2026... and it should be clearer now.  

 

Well, that official US national-debt number—$40 trillion—is a straight-up lie. The US government uses accounting rules that would get every CEO and entrepreneur arrested. Unfunded Social Security and Medicare promises over the next 75 years: more than $400 trillion. None of it is on the government's headline balance sheet. A public company would be required to recognize future obligations. Washington simply doesn't. And when promises can't be paid honestly, there's always another way to settle the bill: Create the money. Inflate the currency. Make everyone else pay. The $40 trillion isn't the whole bill. It's the number this giga-corrupt criminal regime in Washington chooses to put on the books—and Americans and the rest of the world are expected to pretend the other $400+ trillion of this Ponzi scheme doesn't exist. Inflation is a tax. Seigniorage is fraud. Americans, make these criminals economic outcasts. 

 

See also:

Karl W. Miller (August 26, 2026) - Global Diesel Breakdown: Energy shock will move through fertilizer into food supply.
Michael Hudson (August 20, 2026) - Why Time Is on Iran, Russia and China's Side.

Alex Krainer (August 18, 2026) - Japan's Yen Collapse Threatens to Drag the US Down With It.

Pepe Escobar (July 30, 2026) - Iran's Methodical Gutting of US Power in West Asia. 

Foad Izadi (July 29, 2026) - "Iran Will Make Sure the US Economy Is Destroyed."

Why Time Is on Iran, Russia and China's Side | Michael Hudson

Time is on the side of Iran, Russia, and China and increasingly works against the US and its allies. The longer the confrontation persists, the greater the pressure on highly indebted Western economies. As in Russia's past wars against Napoleon and Germany, the decisive advantage need not come from military strength alone, but from an external force that steadily erodes the enemy's capacity to sustain the conflict. Today, that force is the global financial and economic system.

"General Winter"—Russia's eternal ally against her enemies.

The US has contained the oil price shock by releasing oil from its strategic petroleum reserves and encouraging other countries to do the same, despite the major disruption to Persian Gulf exports. But this buys time, and only by depleting reserves and leaving less room for further intervention. The stakes are high because higher energy prices quickly feed into diesel, aviation fuel, fertilizer, transportation, and food costs. With the US midterm elections approaching, Washington is therefore racing the clock to contain prices as its economic buffers diminish.

Weaponizing Survival: Energy, Food, and Sovereign Debt Pressure

Iran's strategic advantage is to avoid escalation while letting economic pressure accumulate. A similar dynamic is developing around Russia and Ukraine, where disruptions to grain exports risk compounding the energy shock. About 27% of global grain trade moves through the Black Sea; Ukraine's harvest is coming in while warehouses are full, and Russian attacks on shipping and ports threaten both incoming supplies and outgoing grain. Much of Ukraine's grain normally goes to Europe, leaving Europe vulnerable to simultaneous fertilizer, food, and energy-price shocks.

 

Asymmetric warfare against Western full-spectrum aggression:

wrecking the enemy through food, energy, and debt.

The crisis need not involve major military escalation because the US and Europe are already too financially stretched to absorb a sustained increase in energy costs without wider economic damage. Higher fuel prices raise transportation, food distribution, and production costs; industries operating on thin margins can become unprofitable; and higher inflation puts upward pressure on interest rates. The resulting pressure spreads to agriculture, trucking, and the movement of crops, with particularly severe effects in the West, among US allies, and across developing economies in Asia and the Global South.

Base, Apex, and Anchor of Primakov's RIC Triangle 2.0.

 

Higher inflation and interest rates also raise the cost of servicing already-heavy debt burdens. Rising bond yields compound the problem in the US, Japan, and other highly indebted economies, while vulnerabilities associated with Japan's currency and carry trade expose the limits of available policy responses. The fundamental vulnerability is therefore debt: governments must increasingly choose between supporting households and industry and servicing accumulated debt.

Sanctions Threaten America's Financial Power 

This pressure also threatens the financial system that has enabled the US to exercise global power for decades. Washington has relied not only on military force, but also on its control of the dollar, international payments, global banking, and the oil trade. By weaponizing sanctions against Iran and threatening Chinese, Asian, and other banks involved in Iranian oil transactions, the US is encouraging those same countries and institutions to reduce their dependence on the dollar. Financial coercion could therefore undermine one of America's principal instruments of power.

 

» We lie, we cheat, we steal. «

murder, slaughter, genocide: children, women, heads of state; weapon, drug, organ, child

trafficking; well poisoning; pedophilia; hijacking; torturing; counterfeiting; looting; piracy; bribery...

 

The oil trade is particularly important because Persian Gulf and OPEC oil have long been key channels of US financial influence. Oil revenues recycled through US banks, dollar assets, and the American financial system have reinforced the dollar's central position. Driving oil producers, buyers, and financial institutions away from that system therefore risks undermining the very mechanism Washington has used as a global economic choke point.  

 

Trump offered billions to Iran's military. 
Iran: "Leave before it's too late!"

Iran's strategy exploits this contradiction. If its own oil exports are blocked by sanctions and trade restrictions, the implicit threat is that broader oil exports may also be disrupted, forcing other countries to choose between accepting higher energy costs and resisting the sanctions regime. Iran cannot defeat the US militarily, even though it can attack US bases in the Middle East; its leverage instead lies in imposing costs on the wider system and forcing other countries to decide how they will respond.

China and the Emerging Alternative

China is relatively well-positioned to withstand such pressure because of its large oil reserves, coal resources, and extensive investment in solar power and other energy alternatives. The broader question is how China, Russia, Iran, Asia, and the Global South will respond if continued US sanctions keep driving up energy and commodity prices. Their incentive will be to develop mechanisms that insulate their trade from unilateral US financial coercion. 

Zhou Xiaochuan, Governor of the People's Bank of China, presenting his
landmark 2009 proposal, "Reform the International Monetary System," 
to the Bank for International Settlements (BIS).

Gold provides one possible reserve asset outside the dollar system. Countries have increasingly added to their gold reserves while maintaining relatively stable dollar holdings; the European Union now holds more reserves in gold than in dollars. China and Russia have also developed alternatives to Western payment infrastructure. China's and Russia's independent clearing systems reduce their reliance on SWIFT, while Iran has experimented with cryptocurrency payments despite the US seizure of Iranian cryptocurrency assets.  

 

The issue therefore goes beyond creating a BRICS currency. What is required is an alternative international architecture for payments, reserves, and lending, capable of financing trade without depending on the dollar, SWIFT, the IMF, or other Western institutions. China, because of its enormous financial reserves, is uniquely positioned to provide the financial capacity that such a system would require. Russia and Iran could contribute oil, with Russia also contributing grain.

The Cost of Dedollarization

Such a system could fundamentally reshape the post-1945 financial order. Countries facing rising energy, food, fertilizer, and chemical costs would increasingly face a choice between supporting domestic industry and households and servicing dollar-denominated debt. As balance-of-payments pressures intensify, governments would have to decide whether scarce resources should go toward subsidizing industry, protecting families from higher heating and food costs, or continuing to pay foreign creditors. The incentive to prioritize domestic stability would accelerate dedollarization and weaken the financial mechanisms through which Washington has historically exercised global influence.

More sanctions, guns, butter, servicing debt, or collapse?

 

China, Russia, and Iran could therefore form the foundation of an alternative monetary system: Iran contributing oil, Russia oil and grain, and China financial reserves. Such a system could remove or weaken several of the instruments of influence established after World War II to structure global trade and finance in America's interest, including control over the dollar, oil, food, and seaborne trade. 

Keynes's Alternative to the Dollar System

The alternative need not be another dominant national currency at all. The argument instead returns to John Maynard Keynes's 1944 proposal for an international clearing institution based on a supranational unit of account called the bancor. Keynes proposed a system designed to manage persistent international surpluses and deficits rather than forcing debtor countries into destructive austerity. The institution would manage intergovernmental debts, allowing countries with temporary imbalances to obtain temporary liquidity while preserving their capacity to become economically self-sufficient.

 

Keynes maybe wasn't all wrong.

The critical difference is that surplus countries would also share responsibility for global imbalances. Keynes argued that the persistent accumulation of surpluses and claims by creditor countries necessarily creates corresponding deficits elsewhere. If debts become so large that repayment requires destroying a debtor’s economy, those debts should be written down—and the corresponding creditor claims written down as well. The US rejected this approach in 1944 because it was then the dominant creditor and had little incentive to accept a system that could reduce its accumulated claims.

 

Keynes's proposal was shaped by the German reparations and transfer debates of the 1920s. His central argument was that a debtor cannot repay indefinitely by suppressing wages, transferring resources abroad, and selling its assets without destroying its own productive economy. A loan made without regard to the borrower’s ability to repay ultimately becomes a bad loan. The same logic, he argued, applies internationally: forcing debtors into permanent austerity can produce depression rather than repayment.

 

The proposed international institution would create an accounting unit based on a combination of gold and member currencies rather than a conventional national currency. It would manage international surpluses and deficits and provide liquidity for temporary imbalances. When accumulated claims became impossible to service without undermining a country’s productive capacity, the system would permit debt reduction rather than compel economic destruction.

China's Potential Role

China could potentially build such an international payments system around productive investment rather than creditor extraction. Its investments in ports, railways, infrastructure, and the Belt and Road Initiative could increase borrowers' productive capacity and ability to earn foreign exchange, enabling them to repay principal and interest rather than forcing them into austerity and privatization. The argument is that, unlike Western financial systems, China has the capacity to structure such financing primarily on geopolitical and developmental grounds rather than purely for financial returns or capital gains.

 

The central question is whether China itself could avoid becoming another creditor power with the capacity to weaponize its currency. The historical lesson, however, is that other countries did not necessarily expect the US to weaponize the dollar in the 1950s and 1960s, yet it eventually did. The same concern could apply to the yuan. The proposed solution, however, is not simply to substitute one national currency for another, but to create an international clearing mechanism that limits any single country's ability to accumulate unlimited financial power.

The End of the Post-1945 Order

The broader conclusion is that the post-1945 financial order may be approaching a structural break. The present conflict is no longer simply a military conflict; it is increasingly a contest between competing economic systems: a creditor-driven and highly financialized model and an industrial, state-directed model represented by China and parts of Asia. The existing system may not contain mechanisms capable of managing this transition. Instead, the world could fracture into parallel financial and economic systems, with the struggle over the future economic order ultimately displacing the narrower conception of a military or civilizational conflict.

Reference:

Michael Hudson (August 20, 2026) - Why Time Is on Iran, Russia and China's Side.

Debt Trap: Western Finance Replaced Productive Capitalism | Michael Hudson

In an in-depth discussion, American economist Michael Hudson and Norwegian political and international relations scientist Glenn Diesen examine the historical and economic roots of the financial instability currently confronting Western economies. Hudson argues that the Western financial system is unsustainable because debt grows faster than the economy's capacity to service it.  

 

Cuneiform tablet on debt and loan quittance.

Historical Debt Relief Traditions

Unlike ancient Mesopotamia, where rulers from the third millennium BC onward periodically proclaimed "clean slate" debt cancellations, known as andurarum or misharum, which wiped out agrarian debts, freed people in debt bondage, and restored land to cultivators, the modern West has never institutionalized such resets. Similarly, the biblical Jubilee tradition echoed these practices by mandating the periodic release of debts and restoration of property. 

Levites sounding the trumpets of Jubilee.

 

Jesus cleansing the temple of the money-changers. 

If it is difficult for someone to repay a debt,

postpone it until a time of ease.

Islamic tradition likewise established a clear obligation to grant debt relief: the Quran (2:280) requires creditors to grant a debtor in genuine hardship a postponement until a time of ease, while encouraging creditors to forgive all or part of the debt as a superior act of charity. These ancient and religious practices helped preserve a viable productive population and limited creditors’ ability to monopolize the means of production. 

From Industrial to Finance Capitalism

The absence of comparable mechanisms today has contributed to extreme polarization of wealth and power. Western economies have shifted from industrial capitalism, which directed investment toward factories, machinery, research, infrastructure, and productive employment, to finance capitalism. 

 

Early modern wage-rent-tax slaves at Ford's assembly lines.

 

The latter prioritizes wealth accumulation through leverage and debt, corporate takeovers, real estate speculation, and asset-price inflation rather than tangible capital formation. This transition has contributed to deindustrialization and concentrated gains among the top holders of financial claims. 

 

Western Central Banking and Creditor Power

Western central banks reinforce this dynamic further: rather than acting as public authorities empowered to cancel or suspend debts that have become unpayable, as Bronze Age rulers did or as Islamic traditions of debt respite prescribe, they primarily support commercial banks and asset markets, enforce creditor claims, and resolve crises by expanding their own balance sheets—thereby protecting the financial sector while leaving household and productive-economy debt intact.  

 

The development of European banking was deeply shaped by the Crusades, when the Church and later secular states used debt to finance warfare. Over time, fiscal policy became increasingly subordinated to banking interests, reversing earlier anti-usury traditions and embedding institutions designed to enforce debt collection rather than protect debtors.

Brokers at the New York Stock Exchange in 1963.

Without an authority comparable to the ancient "divine king," whose duty was to keep debt within the population's capacity to repay, Western constitutions historically concentrated political and economic power in the hands of a creditor oligarchy. Contemporary central banks, rather than reversing this concentration, operate within the same creditor-oriented framework. 

China’s Public Credit Model

By contrast, China treats credit as a public utility under state control through the People's Bank of China. The state limits the emergence of an independent financial class capable of operating outside state priorities and channels credit creation toward national development—factories, machinery, and infrastructure—rather than speculative bubbles.

  

People's Bank of China Headquarter, Beijing.

Because the central bank remains a public instrument, China retains greater practical capacity, analogous to the debt-relief practices of ancient Mesopotamia and the Islamic principle of relieving hardship, to restructure or write down debts that threaten productive capacity and social stability. This approach supports industrial growth and limits the systemic polarization seen in the West.

 

The Ponzi Dynamics of Western Debt

Hudson describes the Western system as a Ponzi scheme: new debt is continually required simply to service interest on existing loans. Because a large share of bank lending fuels asset inflation rather than productive investment, more income is diverted into debt service, domestic demand weakens, and the economy stagnates.   

 

Mug shot of Charles Ponzi.

 

The resulting reliance on continually expanding debt, combined with geopolitical pressures surrounding the dollar and the oil trade, leaves Western economies increasingly vulnerable to financial and economic instability.

Reference:
Michael Hudson (August 20, 2026) - Debt Trap: Western Finance Replaced Productive Capitalism.

Gold Bull 2027-2032, Monetary Reset & EU Breakup | Martin Armstrong

Martin Armstrong correctly forecast the recent six-month correction in Gold and Silver, with Gold falling roughly 30% from $5,600 to $3,900 and Silver about 55% from $121 to $55. Both have since rebounded—Gold near $4,500 and Silver above $66—but Armstrong sees this as potentially only an oversold bounce. 

 

» Gold and Silver bull market from Q1 2027 into 2032. «

He argues that precious metals hedge primarily against government, not inflation: Gold fell for 19 years from 1980–1999 despite rising government debt. The current correction reflects growing market complacency over Iran and Ukraine, while smarter money recognizes that neither conflict is likely to resolve cleanly. Armstrong expects the decisive structural turn in Q1 2027, launching a sustained metals bull market into roughly 2032, followed by a monetary reset—marking the peak of the current public-debt cycle and a systemic shift away from pure fiat structures. Central banks lack effective tools against cost-push inflation from such shocks.

 

» This will lead to dramatic changes. «

 

The EU risks breakup by around 2029. Europe's trajectory increasingly resembles the systems Eastern Europeans fled. Governments act solely in their own interest; free-speech and media constraints (illustrated during COVID and through pressure on journalists) demonstrate the pattern. Energy attacks by Ukraine on Russian oil infrastructure are already creating shortages that force Russia toward imports and are expected to drive energy prices higher.

China Is a Market Economy, but Not Capitalist | Eric Xun Li

In America, you can change political parties, but you can't change the policies. In China, you cannot change the party, but you can change policies. China is a vibrant market economy, but it is not a capitalist country. Here's why: there's no way a group of billionaires could control the Politburo, as billionaires control American policy-making. So, in China, you have a market economy, but capital cannot rise above political authority. Capital does not have enshrined rights. 

White Dolphin Island, part of the Hong Kong–Zhuhai–Macau Bridge (HZMB), a key section of the 55-kilometer bridge-tunnel
megaproject ($18.8 billion) completed in 2018, connecting Hong Kong, Zhuhai, and Macau across China's Pearl River Delta.

US infrastructure would need $33 trillion (baseline) to $42 trillion (desired) of

investment through 2050 for modernization, digital economy, and maintenance.

» Capital cannot rise above political authority. «

Eric Xun Li. 

 

Epstein's BBF and his $12 Trillion "CEO Cabinet" in Beijing, is continuing to work hard

for the ultimate techno-feudal mission entrusted to him by his donors and handlers.

 

MIGA-Don understands that Chinese President Xi Jinping  

expects to see a "deal" between the US and Iran... 

 

...while dimwit Rubio is simply fascinated by

the ceiling of the Great Hall of the People.... 

 

...and Musk, seated next to BYD's CEO,

decides to be the clown of the party.

May 13, 2026.

In America, the interest of capital, and capital itself, has risen above the American nation. The political authority cannot check the power of capital. That's why America is a capitalist country, and China is not. China has been run by one single party, but the political changes that have taken place have been broader and greater than in any other major country in modern history.

 

 

See also:
Eric Xun Li (Li Shimo or 李世默, 2011) - China's political system is more flexible than US democracy.

Michael Hudson (May 14, 2026) - Did Xi Really Trade Iran for Taiwan?
Meg Rithmire, Margaret M. Pearson and Kellee S. Tsai (2023) - The State and Capitalism in China.

Lyndon H. LaRouche, Jr. (2002) - The American System of Political-Economy.

The US Just Made Gold Its Number One Export | Gerry Nolan

America just made gold its number one export, and it’s pouring straight into China via Switzerland. For the last five months running, US gold shipments have topped everything else the country sells abroad. In March alone, they were 1.7 times larger than oil, twice pharma, and two and a half times aircraft engines.

 

» How exactly does this serve the United States? «

  

Most of it doesn’t even stay in America: it sails through Switzerland’s refineries and lands in Beijing’s vaults. This is highly unusual. The US doesn’t ship its oldest store of value to its biggest rival at record pace under normal conditions. Geopolitical tension, inflation hedging, and quiet signals that gold is becoming a settlement mechanism in US–China trade have flipped the script.

America is quietly surrendering the one asset that still commands respect when the dollar starts to wobble. It’s the visible symptom of a deeper reckoning: Beijing is no longer content to hold endless piles of US Treasuries or accept dollars for its oil and goods. With every sanctioned barrel and every BRICS handshake, China is forcing real settlement in the one currency that can’t be printed into oblivion. The empire ships bullion east while its navy steams around the Gulf, pretending it still runs the world. The numbers don’t lie, and neither does the direction of travel.

» Real money to the competition while the dollar-printing machine keeps spinning. «

 

So, tell how exactly does this serve the United States? It doesn’t. But it sure as hell serves China. The empire is literally melting down its patrimony and handing the real money to the competition while the increasingly worthless dollar-printing machine keeps spinning.

Gerry Nolan, May 5, 2026.

 

See also:

Martin Armstrong (May 3, 2026) - Gold and the Stock Market Will Rise Together. (video)
Ray Dalio (2025) - How Countries Go Broke: The Big Cycle.

How Countries Go Broke: The Big Cycle | Ray Dalio

The big cycle is the period from one era of great change and turbulence, in which various systems or orders are transformed, typically through fighting, to the next. Then, through that evolutionary process, we arrive at yet another period of breakdown. The last big cycle began in 1945 at the end of World War II.

 

» This will lead to dramatic changes. «

 

Within that world order, there are shorter-term cycles, like the economic and political cycles. The economic cycles have lasted for about six years from one recession to the next, and they unfold in a way where the economy is weak.  

 

 » In considering which spending to cut, when one looks at the possibilities, one quickly notices that about 70% of the non-

interest spending is considered “mandatory”—i.e., it is either contractually required or politically nearly impossible to cut. «

 

Central banks put a lot of money and credit into it. That causes markets to go up. There's a lot of spending; it gets too hot; inflation rises. They tighten monetary policy, and that causes the economy to go down into recession. Since 1945, there have been twelve and a half of those.

 

» It appears clear that, as the gaps in people’s productivity, wealth, and values grow along with

levels of dissatisfaction about how their democracies are working, it leads to more populist conflict 

and more policies that are like those in the 1905-14 and the 1933-38 periods. «

Average global levels of political polarization since 1900.

 

We sometimes don't pay as much attention to the big cycle when it reaches excesses, such as debt excesses. This is because debts rise relative to incomes. If you look at a chart of most countries, their debts keep rising relative to their incomes, but the incomes are needed to pay the debts. So, when you get to a point where the debts are high relative to the incomes, and debt service is very expensive and starts to crowd out other spending, and investors do not want to hold the debt as much because the debt does not provide them good returns and they start to sell that debt, you begin to have a change in that big debt cycle.

 

 » For the United States, the big cycles look mostly unfavorable. «

 Ray Dalio's “Power Index” for great powers and empires over time.

 

That big debt cycle typically corresponds with the big domestic political and social cycle because wealth and well-being matter to people. When there's disruption to people's wealth and well-being, then you have political disruption, such as what we are experiencing now. Consequently, there's more fighting over wealth and power, and so on. These things come together, which then creates the new conflicts, the new big conflicts: the changes and breaking down of the old orders, the old monetary orders, the old domestic political order, the geopolitical order, and such things to cause seismic shifts. These are periods of great risk for the markets and great risk for society. It's very important that they're understood.

Quoted from: 
Ray Dalio (May 28, 2025) - The Big Cycle Explained in 3 Minutes. (video)

Countries are allowing their reserves or assets to decline while acquiring gold. Central banks bought more gold 

in 2025 than in any year in history. They are not telling the public why, but their actions speak volumes.

See also:

Ray Dalio (2025) - How Countries Go Broke: The Big Cycle (Principles). 

Ray Dalio (October 30, 2025) - Gold is the Safest Money. 

Ray Dalio (April 7, 2025) - Don't Make the Mistake of Thinking That What's Now Happening is Mostly About Tariffs. 

Ray Dalio (March 26, 2017) - The Developed World Populism Index.

Martin Armstrong  (October 24, 2025) - "The United States Is Due for Another Massive Civil War".