Financial, Economic and Social Mood Update (November 1, 2025)
The fiscal predicament of the American federal government continued to deteriorate at an alarming rate in the month of September 2025. At least 60 percent of what the federal government now spends is money we do not have – brand new debt in the form of credit created out of thin air and backed by nothing. The amount of “new” debt issued in calendar year 2025 equals the following: US Treasuries = $5.657 TRILLION, federal agency securities = $1.6926 TRILLION and municipal bonds = $0.6762 TRILLION = a grand total of USD $8.0258 TRILLION. The federal government portion alone = USD $7.3496 TRILLION. Tax receipts in calendar year 2024 were USD $4.9 TRILLION and they are falling this year due to the collapsing economy and due to the “big beautiful” tax cuts plus a 40 percent staff cut at the IRS. Here is a 24-minute video detailing the upcoming collapse of the bond market featuring speakers such as Jamie Dimon and Ray Dalio: https://www.youtube.com/watch?v=dwOuTMa9iLs&t=1127s.
The reports in late October 2025 with respect to the increase in the national debt of the USA have gotten even worse. The national debt of the federal government has surpassed USD $38 TRILLION and it surpassed USD $37 TRILLION only two (2) months ago. If this is the case tax revenues have to be collapsing due to multiple reasons: the so-called tax cuts in the “Big Beautiful Bill,” tariff revenue in no way making up for these cuts, no taxpayer audits being done at the IRS (due to the government shutdown and due to reduced human resources / personnel), and on top of all this a collapse in consumer spending which leads to a collapse in economic activity which leads to a collapse in government tax revenue. We have to be near the end of the road because federal outlays (spending) equal about USD $7 TRILLION per year. If the debt is now increasing at an annual rate of USD $6 TRILLION this means our tax revenue is shrinking to almost nothing. This is an absolute disaster for the value of our currency and for our standard of living.
Note: a collapse in bond prices means that yields (interest rates) will skyrocket. Bond prices and yields have a perfect inverse relationship – there is no other mathematical possibility, period. The situation is so dire that the entire existing political class (both major parties) from the President on down should be permanently removed. Something in the form of a professionally educated and experienced management team needs to get our house in order and at the same time try to ensure that basic necessities such as Social Security, Medicare, Medicaid, SNAP (“food stamps”), TANF, WIC and the Affordable Care Act and other entitlement programs continue to function. We simply no longer have the resources to do anything else be it other programs including so-called national defense and the military.
The asset market is also continuing to collapse at an alarming rate, most noticeably for most people in the form of the real property market where the majority of people who own assets do so in the form of their primary residence or home (98 percent of people DO NOT have a net worth because their debt exceeds their total assets). This trend is now nationwide in all 50 states and 22 of the states are now officially in an economic “recession” according to official government data – the reality is likely much worse than this.
The two most expensive states in terms of cost of living and housing are consistently Hawaii and California in this order and values here are collapsing in real time as well. Average home price in Hawaii has dropped by 3 percent in the past year after a much larger drop in the year before this one – the cumulative 2-year decline is no less than 15 percent and likely closer to 20 percent. The average price decline in the state of California is even more severe – at least 13 percent over the last 12 months and a cumulative 2-year decline of at least 18 percent. For sale inventory and average time on the market has exploded across the USA and in many other countries as well especially in Europe and Asia. The US real estate market appears to be collapsing the most severely in the over-built sunbelt states such as Florida, Texas, Arizona, California and Nevada. An excellent source for accurate real-time information on the US real estate market is Nick Gerli’s Reventure Consulting: https://www.youtube.com/watch?v=jDpLCQijQMg&t=302s.
