Baking a Gigantic Currency Crisis into the Cake – John Rubino

By Greg Hunter’s USAWatchdog.com 

Analyst and financial writer John Rubino has a new warning concerning Trump’s “Big Beautiful Bill” making its way through Congress and Moody’s downgrade of US debt.  The Big Beautiful Bill is going to explode the debt by $20 trillion in the next 10 years, and the credit downgrade has people like billionaire investment fund founder Ray Dalio worries about money printing to pay the $1.5 trillion in interest on federal debt.  Rubino warns, “The story with Moody’s downgrade isn’t that they did it, that they moved the US from triple A (Aaa) to one notch below (Aa1).  It’s kind of insane that a government with 125% of GDP has an investment rating at all.  Right?  They are clearly baking a gigantic currency crisis into the cake.  Ray Dalio gets it right.  The rating agencies excuse or explanation for why the US still has an investment grade credit rating is that a country with a printing press can never default because it can just print enough money out of thin air to pay interest on its bonds, and it can do that forever.  So, it’s triple A credit, which does not make any sense at all because if you just print a lot of money out of thin air to pay your debts, then your currency goes down in value, and you are paying back your creditors with depreciating currency, which is a form of default.  The credit rating agencies are only looking at one kind of default where we just stop paying.  They are not looking at paying with cheaper currency year after year, and we stiff our creditors that way.  That’s why you don’t want to own Treasury bonds.  They are not going to stop paying interest, but the interest will not cover inflation going forward.  So, you will have a net real loss until they just crater, and then you will have a massive capital loss.”

On top of that, interest rates have been rising and not falling.  The 30-year mortgage rate is now just under 7% again.  Rubino says, “We went back up to unsustainable interest rates really quickly. . . . The Fed has promised a couple of rate cuts this year, and for interest rates to go up while the Fed is inferring easing means we are risking losing control of the financial markets.  If the Fed can’t control interest rates, we are monumentally screwed as a financial system.  That’s kind of what we are headed for now.  In the US, interest rates are going back up, but if you want to look at an extreme case, look at Japan.  They don’t just have 30-year bonds, they have 40-year and 50-year bonds and those are cratering, which is to say the interest rates on those bonds are spiking.  Long term Japanese bonds used to be 0%.  Now, they are 3% and change. . . . That change is huge.  So, Japan, the US, Europe, the UK and China, all of these big countries are basically making the same mistakes, and they are all headed in the same direction.  We are in the early stage of a currency death spiral where interest rates start to go up and the government can’t control that and then their debt goes parabolic . . . and this goes until everything breaks down.  We are in the third inning of that game, and the last couple of innings are going to be hair raising.  There are going to be currency crises, which we have never seen in our lifetimes. . . . It will be fun times if you are a gold bug.”

Rubino thinks gold will go up in price way over $10,000 per ounce, and he also expects silver to take off too.  Rubino says, “Silver is a great story because it is an industrial metal that is in deficit.  Industrial uses are taking more silver off the markets than what they are producing, and that is going to lead to a shortage.  Even if you don’t look at silver as a monetary metal, the industrial demand makes it a buy right now.”

Rubino does not think the US will be in a civil war, but Europe is going authoritarian, and civil war is most likely there if Russia does not blow them up first.  Rubino thinks America will do better than Europe, but we will still have trouble, chaos and a financial reset to work through.

There is much more in the 46-minute interview.

Join Greg Hunter as he goes One-on-One with financial writer John Rubino of the popular site called Rubino.Substack.com for 5.20.25.

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After the Interview:

John Rubino is a prolific financial writer, and you can see some of his work for free at Rubino.Substack.com.

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