Name: America’s Debt Problem is Getting Worse
Uploaded: 2025-08-01T18:30:58.000Z
Duration: 15 min 59 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

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The bone market in the US is valued at 55 trillion dollars, and 27 trillion dollars of that belongs to the government of the United States.

And if you look at the numbers, bone yields are rising, and that is catastrophic news for the US government.

The bone market is the foundation of the global economy.

Everything that you see depends on the bone market.

The interest rate that you pay on your house depends on the mall market.

The bone market determines what is going to be the final price of your car.

The bone market determines how much in interest you are going to pay on your credit card.

So whenever you see that the bone yields are rising, you have to understand that it is having a direct impact on you, on your life, and on your pocket.

So here in this video, let's figure out what exactly is happening, why yet again bone yields are rising, and how exactly that market works for us to have a clear understanding and what to expect out of the bone market in the foreseeable future.

You see, the entire bone market is one big Ponzi scheme, and it seems very controversial because that's not how you call it.

How on earth do you call the world's largest market a Ponzi scheme?

The government debt of the United States stands at 37 trillion dollars.

And the United States needs to attract new investors in order to pay off older investors.

And that's how the cycle keeps going on and on.

And that's why whenever the yields on the bones rise, now it's much more expensive for the government to raise money to pay older investors.

It doesn't work exactly like the United States directly paying off those older investors.

But the United States consistently needs to raise more money in order to pay off older investors.

So if you look at it from the honest perspective, then it's no different than any other Ponzi scheme that attracts new investors in order to pay off older investors.

So whenever you see that bone yields are rising, you have to understand one simple fact, that a bigger chunk of the budget is going to go towards paying the investors on that debt, which means that less money will be spent on social security, which means that less money will be spent on medicare and so on and so forth.

And because the entire global market is interconnected, the bond rates will also determine your mortgage rate.

Yes, maybe the mortgage rate or the house that you are trying to buy isn't directly linked to the bond market.

But whenever the rates on the yield or the yields on the bones starts to rise, now investors are expecting a higher return, and that includes banks as well, which is why they will start raising their interest rates on the mortgages that they lend to you, which is why the payments that you make on a monthly basis on that house is going to rise.

So whenever you see that bond yields are rising, it means that now you can afford a less expensive house, because that $400,000 house including with a mortgage would now cost $500,000 just because there is a single percentage increase in the interest rate.

The same thing goes with cars and everything else that you pay on credit.

Now if you are filled with cash and you have no problem and you never use the banks, it's not going to affect you at all.

But if you look at average American, everything is on debt, whether you are trying to buy a house or it's a car that you are trying to get with an auto loan or basically it's a credit card or a personal loan.

Simply put it, 70% of all the houses in the US are being purchased with a mortgage.

When borrowing becomes more expensive, it will also influence the businesses, which is going to lead to an economic slowdown.

Every single business that you see, whether it's in the stock market or not the stock market, they rely on debt to finance their operation.

If you look at the balance sheet of Apple or Microsoft, you will see that there are tens of billions of dollars on debt.

And even in 2020, when they fed lowered the interest rate to almost 0%, who were the biggest beneficiaries of those debts?

It wasn't the average American who also benefited out of it, but it was also primarily the huge corporations that borrowed as much money as they could.

Because why not borrow as much money as you can when borrowing that money is absolutely for free.

But when the yields in the bond market rise, the cost of borrowing capital for those corporations is going to rise, which means that now they will finance less projects, which means that they will make less profits and they will hire less people.

At the end of the day, that is going to result to an economic slowdown.

But it's also going to have an opposite impact.

Higher yields attract capital from the stock market.

If you have a bunch of investors buying stock in the stock market and the stock market is rising, and suddenly they turn around and they see that the government of the United States guaranteed 5% return on a government bond, what do you think they will do?

They will sell their stocks because in the stock market, there is always an element of  Yes, the top 500 companies in the US have proven to be some of the best and safest investments in the history of the world.

But when your debt is guaranteed by the government of the United States, that's a completely different thing.

You might sacrifice one or two percentage, but you are still getting 5% guaranteed by the US government.

Which is why when everything is over, there is a good chance that a lot of that money is going to go back to the stock market, boosting stock prices.

So maybe the stock market at this point should worth a lot more than it is right now.

Which is why it's entirely possible to expect a slower growth out of the stocks, at least in the foreseeable future until this cools down.

Now in my humble opinion, yields are going to go down when everything is going to calm down.

But now the question is that, what exactly is leading to these high yields of bonds?

What exactly pushed bond yields to rise dramatically in such a short period of time?

Because at the end of the day, whenever yields are rising, it means one simple truth, that investors have less confidence in the US government.

If I have less confidence in you, I will ask for a higher interest rate if I am going to loan you money.

If I have full confidence in you and I believe that there is literally 0% off risk by loaning that money to you, then I will demand a much lower interest rate.

And that's how every single investor thinks, and that's how they are approaching the government of the United States.

And the government of the US has no other option but to comply with that.

It's simple, you have so much debt, you have like a Ponzi scheme and you have to satisfy the new investors.

You cannot possibly default on your loan because that means the end of the economy.

And restructuring or rebuilding a new currency in a country with a currency that is a global currency reserve is not going to be an easy job, which is why you are going to keep borrowing to satisfy the new or older investors by attracting new investors by raising your yields.

The 10-year government bonds have increased from around 4% around here to almost 5.5% or even more than 5.5%.

The 30-year treasury bills have increased from around 4.5% or less than that to over 5%.

So if I believe that the risks dramatically rise in 30 years, then I demand a much higher interest rate.

So the government of the US is slightly increasing the yields on those bonds in order to attract more and more investors, in order to achieve the point where investors will be satisfied and they will start again buying those yields.

Now there are multiple reasons that lead to the rise in yields.

The first and the most important reason recently is that there are going to be 50% tariff on 1 trillion dollars worth of trade with the European Union.

European Union is the most important trading partner of the United States.

They have one of the largest markets in the world, they have some of the strongest economies in the world.

Individually, some of these countries are really bad or economically suffering.

But overall, as a bloc, they represent the second world's largest economy.

You have France, Germany, Spain, Portugal, and a long list of other countries.

And the trade between the two countries is 1 trillion dollars.

And let me quote what exactly Trump said about the European Union.

The European Union, which was formed for the primary purpose of taking advantage of the United States on trade, has been very difficult to deal with.

Their powerful trade barriers, VAT taxes, ridiculous corporate penalties, non-monetary barriers, trade barriers, monetary manipulations, unfair, unjustified lawsuits against American corporations and more have led to a trade deficit with the United States of more than 250 billion dollars a year, a number which is totally unacceptable.

Which is why I am recommending a 25 straight 50% tariff on the EU.

And that is really bad, that's what drives investors away, that's what investors are afraid, we don't want to see a 50% tariff on the most important ally or a trading partner of the United States.

When it comes to goods alone, yes, there is a trade deficit, but remember, besides goods, we also have services.

So the total trade, if you take also goods and services, accounts to almost a trillion dollars between the two continents.

And putting a 50% tariff there creates a huge problem in the US economy, because the United States economy probably won't grow as much.

You have so many US companies doing business in the European Union.

You have to understand that they have the power to retaliate to the United States by imposing a similar tariff.

Do you want to see a similar tariff in the United States?

If you think about it deeply, yes, in the long run, the United States will be perfectly fine.

It's not like by starting a trade war or eliminating trade with the European Union will be the end of the US economy.

But because it plays such a huge role in the US economy, it is going to have a devastating impact.

And also, that market will be taken by someone else, and it's certainly going to be US competitors.

It can be China, or maybe it could be local European Union companies that will be competing with the United States.

And if they take over entire European market, they will have an upper hand and they will be able to compete with the US companies on the global stage.

The second reason is one big beautiful bill that was just passed, because it is going to raise the debt by $9.1 trillion over the next 10 years.

Now, the United States government is already running a $2 trillion deficit, and it's not going to be fixed anytime soon.

And the debt ceiling must be raised over and over in order to prevent a default of the government.

And now the Republicans have passed the big beautiful bill in the house.

And once it passes the Senate, it will be that Trump's tax cuts will be permanent, and they are going to cost the government an extra $9.1 trillion just in the next 9 to 10 years.

I'm not even talking about 30 years, what they could potentially do.

If you are overspending, but you are not raising enough taxes, what is that going to do to your economy?

You are already spending like a trillion dollars just to service the debt that you have.

An extra 9 to 10 trillion dollars is going to have devastating impacts.

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America’s Debt Problem is Getting Worse

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