The US Debt Can’t be Repaid - So What Will Happen Instead?

or sometimes it's just like sorry, I just can't pay. It's not great default, or sometimes it's something in between. But what happens when you look at all the debt and you look at the ability to pay it back and you realize there's just no way, and you realize it can't even be paid back. And with about thirty four trillion dollars of debt for the US government about three hundred trillion dollars a debt for governments around the world,

that's the realization that many are starting to have. So in this video, I'm going to go over how the US got into this debt mess, the speed at which it's growing, what the government projects it to get to and the only four ways out of this mess. Now, for those of you that don't know me, my name is Mark mas. I've been an entrepreneur for over twenty five years. I've invested and made millions in tech, real estate, bitcoin, and a whole range of other sectors. Over the years.

I speak at some of the largest financial conferences in the world, but through this channel, I've been able to reach more people than I ever could in any of those rooms, and I'm thrilled. And on this channel we just hit five hundred thousand subscribers. So if you're new here, click that subscribe button and let's just get into the video. All right, So talking about the debt that can never be paid back, the first thing is we have to understand first of all, what is the debt and how

does it get paid back. Then we'll get into like what does that mean for our portfolios and all that, But first thing, let's just talk about the debt and how do we pay it back. So the first thing is if we want to understand the debt, let's first understand the ability to pay it back. And we want to look at the money supply. Now this is the United States. We'll look at the global money supply as well.

But if I borrow money, if I have debt, I have to pay it back with money, right, So the first thing is let's take a look at the money. So what we see here is the FED, the Central Bank of the United States, the Federal Reserve, and the money supply. And what you can see I put some trend lines here. It had been going at this trend

right here, at this even pace. Then it started it sort of picked up to the next trend line, and then it started getting steeper, and then it started getting steeper, and now the money supply is growing at this insane alarming rate right almost going parabolic. You can see that right here. However, as parabolical as that is, that's about twenty trillion dollars, which it sounds like a lot, but not in comparison to the debt. So that's what we're

looking at. Now. If I take out debt in US dollars, what do we have to pay the debt back with US dollars? So we have about twenty trillion of US dollars. Okay, Now this is the debt clock, and this kind of keeps track of how the debt's been going up. You might have seen this before. There's a whole lot of data on here. I'm not going to go through all of that, but the main thing I want to look at right here is this. You can see this in real time, like ticking higher, higher, higher, or over thirty

four almost thirty five trillion dollars in debt. So right off the bat, like we owe thirty five trillion dollars, but we only have twenty trillion dollars to pay it back. That sounds like a problem, and you would be right, it certainly is. Now if we look at the government debt, we looked at the money supply is growing, we can also look very similar and the debt. The debt had been on this trend line barely even moving forever, and then the debt started going higher, and then the debt

started going higher. Look at these trend lines changing, and now the debt is almost going straight up. As a matter of fact, we're adding about the United States adding about one trillion dollars every quarter every ninety days. To put this into perspective, the US government added about a trillion dollars from the inception of the country all the way to like the eighties and now we're doing that every single quarter. Now, this is government debt again, this

is government debt, thirty five trillion dollars. But then we also have all the people, me and you, all the individuals that owe debt as well. And we can see this is what we call household debt, not public debt, but househ debt. And we're at about almost eighteen trillion dollars there, thirty five trillion plus eighteen trillion, and we only have twenty trillion dollars of all the money to

pay it back. It sounds like a problem, and it is, but it even gets worse because that's just the United States. But of course there's a whole world out there. So if we look at the whole world, what we see is that the entire global debt is three hundred trillion. As a matter of fact, it's even higher than that. So over three hundred trillion dollars in debt. But do we have enough money to pay it back? Now, if

we look globally, there's a problem. Part of the problem is that how much money is there even in the world, And that's a question that we really can't even answer. But we can get a couple of measurements and take a look at it, and we can see that it's difficult to give a specific answer, so we'll see different numbers if you look at it. We'll take the high number. We can see that the value of notes and coins in circulation, so the money that we have is about

eight point two trillion. That's just the dollar bills, the coins, et cetera. Eight point two trillion across twenty major countries plus the Euro Area, so not just the United States, but globally. That's about the money supply. Now we can go a little bit higher. Like I said, let's go on the high ends. We can get the benefit of

the doubt. Here. We can see the global M one supply, not just US dollars, but the global IN one supply, which includes all the money in circulation plus travelers checks plus deposits like checking and savings accounts, was about forty eight trillion, So let's call it fifty trillion dollars against remember three hundred trillion debt. But if we want to go even higher, we could say that the M two supply is about eighty two trillion. Let's take that number,

so we have about eighty two trillion dollars. Some estimates are maybe even as high as one hundred trillion. Whatever, we have one hundred trillion dollars in money to pay back three hundred trillion dollars in debt, and you start to understand the magnitude of the problem that we have. Here's a graphical four format so you can understand a

little bit better. This giant section of the pie chart right here, that's the global debt, and this little sliver area right here that's the amount of money that we have. So we don't have near enough money to pay off near the debt. So that's the problem. So how does that get paid back? We're going to dig into that. So the first before we get into how does that get paid back? And what does all this mean? First we have to kind of project, well, how much more

will the debt even grow? And of course we can just look right at the government for these answers. The first thing you have to understand is that we are in a debt based monetary system. So you know, we talk about the Federal Reserve and the printer go burgh those types of things, which is a funny meme, it's not actually how it works. Right. Money is created through debt expansion. When you get a loan for a house, of car, boat, et cetera. That money is created out

of thin air. Corporations get money from debt, Governments get money from debt, and so in this debt based monetary system, it has to always be growing or the whole whole thing falls apart. So it has to expand, and all money comes from debt. And so understanding that key fact, let's take a look at some of these projections. So here's for the United States, which of course is the US dollar, and it doesn't matter where you live in the world. US dollars the reserve currency the world's with.

This matters. Now, what we can see is this is US public debt and as it's projected to increase. So we can see here in the year two thousand, here we are about twenty twenty three, and here we are twenty fifty, and what we can see is the payments on the debt going up from one percent to five percent. We can see the deficit going higher and higher higher, no deficit in two thousand. We actually had a surplus, surprise surprise to five percent of deficit in twenty fifty,

and we can see the percentage of debt. This is the alarming one, going from thirty eight percent debt to GDP up to one hundred and seventy five percent projected. And so basically what we're looking at is the debt will continue to go higher at an ever, ever faster rate. The CBO again put out this chart that shows this

in another format. So here we are right here with a record amounts of debts, as a matter of fact, more than or about where we were in World War one world War two, and this is what it's projected to do. That's from the government's own admission. This is not me making this up. Now. If we want to look at this globally again, that's the United States. If we look at this globally, what we can see is something similar. And we are right about here right now,

and that is where it's expected to go. We'd already don't have near enough dollars to pay back the debt that we owe in the first place, and the debt is expected to go a whole lot higher. So where do we go from here, Well, there's four ways out. Radialio broke this down very well in his book talking about this sovereign debt crisis, which is basically what we're in. And they said, there's four ways that we can get out of this. Number one, we can have austerity, and

that basically means the government goes on a budget. I mean, so let's cut spending by whatever, far fifty percent, let's increase the taxes. So we cut spending, we bring in more revenue, and we'll save our way out of it. Of course that doesn't work. The people that are on the doll the people that get benefits from the government, they certainly don't want that to happen. Sometimes you might hear, well, we owe the debt to ourselves, right, we could just

not pay it back. Well, not really. So we obviously owe a lot of other government's money China, etc. Probably won't like that if we decide not to pay them back. But we owe it not to ourselves. We owe it to the people of the United States. So if you have a retirement account for our one K mutual fund, a lot of your money is probably in the government's hand and they owe that money to you. And so if they decide not to pay that back, that's your

retirement money that's gone. Even more. It's not that they can always just print the money, right, because they owe people medical services, right, and so this is a big problem. Number Two, they can do a debt restructuring. Hey, look, we're way over our skis on this. There's no way that we can pay this back. We'll pay you back fifty cents on the dollar, ten cents on the dollar, something like that, maybe extended out the way. And this is, of course, the most likely scenario is we'll just print

the money. And of course this is what governments around the world are doing. They'll continuing to expand the money supply the debt because they're continuing to print money. Now, the reality is that it's not one of these, it's really probably all three. So for example, they're going to increase the taxes, they're going to restructure the debt for longer refinance it, and they're going to print money at the same time, and they're continue to use all three

of these. But there's the fourth way, and it's sort of like betting on a miracle, and the miracle is we could have a productivity miracle. Now, a lot of times people talk about this, like if we could just come up with like free unlimited energy, for example, nuclear fission, if we could come up with that, then we'd have this productivity miracle and we could grow out of it. You have to understand that we have remembered the ratio

is debt two GDP. It's a nominated denominator. So we could either bring the debt down or we could bring the GDP up. So if we have a productivity miracle, we could grow our way out of it. Hype ethically, but maybe we actually can. Are we on the verge of a productivity miracle that could potentially see us do this? And the answer is maybe we are. So what am

I talking about specifically? Of course AI? We have an AI driven boom that is completely changing the landscape of the entire world from everything that we know, from how we get information to how we work, to whether we have a job or not, what type of job you'll have, which new businesses are growing, and even potentially saving governments from reckless spending by having a productivity miracle. So obviously I'm talking about, like I said, the growth of AI,

and we've seen how fast this is growing. Some ways we can look at this just from a chart is look at VideA. If you haven't be paying attention in video you're not paying attention at all. And what we can see is that in Vidia has basically shot up like a what is this like a meme stock, a crypto stock. I mean, it's basically gone straight up for no reason. There's no fundamental reason if we try to analyze it like a typical stock, why it's gone up like this. But it's gone up like this because of

the AI boom that's going on. So is business has become more productive, meaning I can get more work done in my business without hiring additional people. That means my profitability goes up. Right, doesn't mean you have to have mass layoffs. But let's say that now there's a lot more higher level jobs from coders and things like that. So now maybe people are making more money again, that pushes the GDP up and maybe, just maybe we could grow faster to move the GDP up faster than the

debt's growing. The question is this actually realistic? Well, I've studied the data, I've studied the math, and maybe, but there's also a big danger as we transition into that. I want to break all of that down for you, but real quick, before I get into that data, I just want to let you know, I got a sponsor for this week's show. I want to let you let you know about them real quick. I'm talking about iber America.

Here's their stock ticker right here. And the reason why this company is probably a good one sponsor for this video is because they are at the forefront of the AI boom. I've talked about before, the different commodities, whether that's lithium or cobalt. We talked about copper, how copper's being used in the AA boom. One thing that's being used in the air boom, and you can see from this chart right here is ten, Yes, the old metal tin.

And you probably don't realize how much ten goes into the data centers and more specifically the microchips like Nvidia uses when they put them onto a circuit board, they have to solder them and that all requires ten. And so you can see ten is also going up like in Vidia like a meme stock as well, and that's because of the demand now we have at this iber America basically is going to be Europe's largest ten mine

in the world. Now why does this matter, Well, it matters because the majority of ten around the world right now is coming from countries that we would say are non friendly. As a matter of fact, China, Indonesia, and Peru make up seventy five percent of the supply of ten. You already know we're trying to de couple from China. We can't depend on them anymore. Indonesia we can't. We have such heavy sanctions on them because of their environmental policies.

And Peru has massive disruption in their mining sector. You can see. Foreign investments need to understand that there's massive political risk in Peru. And so most of the supply of ten comes from non friendly countries, and here we have one in Europe. Now. The key to understand this also is that the only way to get access to ten is different than most commodities. You can't just buy it through an ETF. The only way you can get exposure to ten is by buying one of the producers.

And you don't want to buy a producer in Peru or China or Indonesia, and so maybe in a European company might be a better way. Now, real quickly, just got to get back to the video, but real quickly. The team is stellar. David Young, he's been head of natural resources at Carlisle Group, which is the fifth largest private equity firm. He managed over four billion dollars of

resources at there we have Gene McBurnie. He was the CEO of can Accordingenuity, which is the second largest Canadian investment bank, co founder of GMP Securities which is an investment dealer, massive, massive talent. Here, we also have Hatch Consulting which is is on board to get the production back on track. We'll talk about that production in a second.

And lastly, real quick before we get back to the AI boom, we know that Iber America, while at the forefront of this AI boom supplying the ten that we need, they basically have done something by going and acquiring this mine in Spain in Europe, and they bought it. And the reason why they bought it is the company that had it before mismanaged it. And part of the mismanagement

was also just the cycle of it. The AI boom wasn't there, neither was ten and they were able to buy a mine here that was worth seventy eight million dollars and they bought it for only six million. So what happens in the siicylity of commodities, So they bought a seventy eight million dollar asset for only six million dollars, and the buyer, iber America, is only an eighty million dollar market cap. So an eighteen million dollar market cap

is buying an asset for seventy eight million dollars. What do you think potentially happens with this company as ten continues to take off? Now, the good thing too, is this is all happening right now at the time of this video. As a matter of fact, they're closing on this deal in the next two weeks. And their goal is they have the time, they have the money, and they have the know how to put this back into production right right now, right at the time that AI

is completely blowing up and they have the ten. Okay, now, enough with that sponsor check them out if you want. But let's get back to can this AI productivity miracle help us grow out of this? Okay? So let's look at this from a couple areas. So the first thing that we can see is when we've looked at something like this in the past, it gives us an idea. I always use history. History is our guide to the future. So, for example, when we had the Internet boom, what'd the

Internet do? The Internet increased our efficiency. Now instead of having to drive somewhere for a meeting, I just go on zoom right, instead of having to drive to a store pickup stuff, and I can click a button and have it shipped to me. So internet was also something that really created this productivity boom. And what we can see here in two thousand, this is a chart here of corporate profits, I meaning corporations making more money. When

corporations make more money, that increases the GDP. Right, So right here is when the tech boom happened. This is the year two thousand, the dot com boom. And look at this trend line. So this is the corporate profits. We're on this trend line right here. Then it started ticking up a little bit because in the eighties we started getting you know, computers and some of the businesses and things like that. So productivity started picking up here.

But right here where the two thousand dot com happened. Look at the new trend line that started up. See how much faster corporate profits went up, how much faster GDP started going up. And now you can see since twenty twenty we are on a straight line. So the precedent shows that technology does increase efficiency, which boost corporate profits, which then brings up GDP. Okay. Another way, we can take a look at this specifically that's historically, but we

can also look at this from AI. So this is some of the projections. What we can see is that the AI market cap we're right here right now, it's been growing pretty slowly. But you have to remember this is all still pretty new. What do we less than two years or a year and a half into sort of since open ai was introduced, But it's projected to grow at a three or thirty three percent compounded annual growth rate. That's amazing. It's enormous and if you're not

using in your business, you totally should. In our business, we use it all over the place already a thirty three percent compound and annual growth rate. And so that's how fast the aiboom is going to continue to grow, and it's going to continue to cause all other things to happen, and a lot of it is in the demand of the commodities and things like that. Now, there is some downsides to this, and I don't want to

go deep into this right now. I can make another video if you want, But typically when we have this pulse of productivity, maybe some people lose their jobs. Now those people can go find higher pain, but there is some danger in the short term. And again we have historical precedence for this. If you want me to break that down on a video, let me know. In the commons down below, we can make a whole separate video on that. But what we do know is this AI

and the tech trend is very very strong. Now. We know that technology happens in about fifty year cycles and it drives financial markets. So what's driven financial markets the last fifty years, Well, it was personal computers, telecom and internet. What drove it before that? It was for gmge What drove it before that, well it was steel railways. What

we drove for that oil? Right, And so what we know is the next fifty years is going to be dominated by AI and crypto part of this fifty year technological boom, and maybe, just maybe it could grow our way out of this. It's a miracle. Maybe. Now, if you want to know more about these fifty year cycles, I did a whole video on it. We'll go ahead and link it up here if you want to watch that. But let me know what you think about the video. Can we grow our way out of this as a

miracle or is it just smoking dreams? Let me know own the comments down below for Subscribertion. I subscribed like the video if you liked it. If you don't, you can give me a thumbs down. That's okay, but at least tell me why in the comments down below. And that's what I got to your success. I'm out.