It's essential that the debt ceiling be raised in a timely way so that the U.S government can pay all of its bills when they're due. Failure of the United States to honor all of its debt would call into question our credit worthiness, Financial and economic chaos would ensue. We potentially face an economic and constitutional catastrophe which United States 21 days away from a default on the horizon and just two days away from the expiration of the coupon code linked down below: big price increase coming in. Email us for bundles at Kevinme Kevin.com but more on that later.

For now, a default could destroy the United States dollar, Elevate China's Yuan to the reserve currency status of the World Elevate the partnership between China and Russia and China and the Middle East. with countries like Saudi Arabia and Iran, it could destroy the United States perfect credit history that the United States so gratefully and effortfully enjoys. and it could plummet the stock market leading to a disastrous crash. Not even Jerome Powell could save us from the bond market, could collapse leading to a skyrocketing of interest rates and unemployment the likes of which we have not seen in the last 100 years.

All of a sudden, the United States debt, which is the only asset that's deemed risk-free would become a risky asset. Not only could our government a shut down leading to Veterans not receiving pay, those on Social Security and Medicare wondering if they're going to get paid while individuals working for the federal government like those on our border or those at our parks are off work without pay Leading also to questions of will TSA continue to be able to operate and will our economy come to a halt as planes are unable to fly because the government stops paying its bills. Is this all just recklessness? Because ultimately the government should be balancing a budget. Why after all, do we have a budget bill that we pass and we authorize temporary tax cuts that end up becoming permanent or temporary tax incentives that end up becoming permanent, all only to end up having the negotiation again when it comes to the debt ceiling.

If we want to stop spending so much money, why don't we do So when we go to swipe the credit card, stop swiping the credit card and maybe be a little bit more logical with your spending rather than complaining when the credit card bill comes in. But then again, logic is very rarely used in Congress because it just doesn't get you votes. Logic instead is what we like to use on this channel, which is why hopefully you subscribe to the channel. and it's of course, what we use in our course member live streams every day.

For example, people when we analyzed Palantir yesterday with the following to say: analyzing the low volatility, the low expectations for earnings, and the Monstrous balance sheet that Palantir has with some phenomenal numbers, all which led into earnings shooting the stock up over 20 percent. Here's that clip from the course member live stream which you should consider being a part of. This company is not going anywhere. They are not going anywhere.

They are so fat padded. Holy crap the volatility on the 10-day averages in the toilet for Palantir average movement after one day 14.2 percent. Today's implied one day movement 5.5 percent. That's below my seven percent which means could be could be worth a YOLO call.

But the point is, a spending gets votes. It's why it was so easy for both Republicans and Democrats to spend money on stimulus and unemployment pay during the pandemic. It's also why you have people like the Governor of California able to spend money like a drunken sailor providing stimulus checks to households making up to five hundred thousand dollars as recently as seven months ago, while we were in a time of some of the worst inflation in the last 40 years, and now all of a sudden the government of California is defaulting on 20 billion dollars of money they borrowed from the federal government. Yeah, California defaulting is actually contributing to this debt ceiling crisis that we're all now as Americans saddled with.

So in part, you can blame California again for not paying their bills and Governor Newsom wants to continue to send stimulus checks to households making up to five hundred thousand dollars while at the same time force small businesses and business owners to make up the losses that the state can't properly manage but ignore. California for a moment. And let's focus on the fact that the Speaker of the House, Republican, Kevin, McCarthy and Biden are just now having their first meeting in three months to hopefully discuss what options there are to avoid a devastating default. And those options are exactly what we've got to talk about now, because while on one hand people say hey, look, maybe artificial intelligence will lead to a productivity boom and the debt that we have outstanding today will end up becoming a small amount of our future budget optimists say hey, Even in the optimistic scenario that our GDP does explode, our economy blows up in a great positive way and this debt becomes irrelevant over time.

We'll probably just end up spending more money and being in the same situation once again. This is why we've raised the debt ceiling 78 times since we created the debt ceiling in 1917. That's right, we've been through this 78 times before and we've always extended it. But today people say this time is different because 55 percent of Republicans don't want the debt ceiling to be extended and ultimately Congress has to do what the American people want and Americans are frustrated that we can't balance our budget that we're on this unsustainable fiscal path.

So what are the options going forward? Well, here they are. There are 10 options. Option number one is declare the debt incompatible with spending laws. This invokes something known as the later in Time rule which basically says Ah The 1917 law is old.

Since we agreed to spend money by swiping the credit card after 1917, we need to pay the At and ignore the 1917 debt ceiling law. Option number two is to use some Creative Accounting again which is beyond what we're already doing and we could buy back old bonds at a discount. It basically takes cash we have today. We buy back low interest rate bonds at a discount and then we subject ourselves to a higher interest rate on new borrowing which we can now do since we paid off some of our debt and what we're really doing is increasing our interest costs for the sake of buying some time.

Not a great option either, like option number one which would probably just get held up in courts and wouldn't go very far would require an act of Congress which puts us back to where we are now. Option number three is asking for an advance from the Federal Reserve but many people say that's just debt and that would not bypass the debt ceiling so that leaves us maybe with option number four, which we've got 10 options here. Not all of them are great, but option number four is a crazy one that could work. but let's evaluate if it actually will.

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So option number four is the trillion dollar coin idea. The Treasury via a 1997 novelty coin act basically allowed the treasury to issue novelty coins. And so this is where this idea came of. Well, maybe the treasury can just out of thin air, create a coin and then go deposit it with the Federal Reserve.

So think about this, kind of like you creating a 100 Bill and then going to the bank and saying hey, can you give me five twenties Here you go. It's not technically a loan because you're giving them something that is worth a hundred dollars. Now technically, the bank might look at your sticky note and go do that in a hundred dollars and the FED could do that. The FED could reject the trillion dollar coin.

In fact, they've alluded to rejecting the trillion dollar coin idea and it would also change the long-standing precedent that it is the Fed that creates money out of thin air and the treasury borrows it. If the treasury could just create money out of thin air, we might actually end up losing even more trust in the US dollar than we've already lost, because now all of a sudden, you've got the FED creating money out of thin air and the treasury creating money out of thin air. That would be wild, but it could in theory happen. The next option is option number Five, which is using the 14th Amendment which basically breaks the 1917 debt ceiling law because the Constitution would then say well, and the Constitution already says quote, the validity of the public debt authorized by the law shall not be questioned.

You could combine this somewhat with option number one, where you say, look, we signed this spending into law after 1917 that is the time see pieces and you could combine that with the Constitution as a way to justify it, saying public debt shouldn't be questioned like we should not default. That's an option and Biden could invoke this though right now, he says he has not considered doing so. Although a lot of people question what he has considered doing. Option number six is known as a discharge petition.

This has worked twice in the past in 2002 and 2015. This is basically when Democrats force a vote on a debt ceiling increase. However, it would require five Republicans joining Democrats Those five Republicans would likely be committing some form of political suicide, but it could be great for a the country B Biden and Democrats and see Kevin McCarthy because Kevin McCarthy then wouldn't seem weak. Instead, it was five Republicans who were weak, But again, convincing five Republicans who are up for election every two years in the House of Representatives to commit political suicide is unlikely, especially since 55 percent of Republicans do not want to see the debt ceiling increase.

Instead, they want a balanced budget. Which again, the time for a balanced budget is when we pass the budget and pass individual bills, not when we've already spent the money and now we're deciding not to pay. Although the frustration is when Democrats had control of the House and Senate and administration, they jammed bills down the throat of Republicans Republicans had no power to actually negotiate and so Republicans are like look, we're just we're just giving it back to you like y'all pass stuff when you had control and you didn't give us a chance to negotiate. So now we're going to do the same thing to you tough because now we're gambling with America and we risk the highest unemployment we've ever seen in the last 100 years, which would be bad.

Option number six is just kicking the can down the road, which has happened many times before. We basically just extend the debt ceiling discussions through September 30th or until the end of the year. Uh, September 30th is the end of their fiscal calendar year, which is a fancy way of saying a different calendar or just the end of the actual calendar year. December This has been done many times before.

I Don't think a short-term extension does anything. Option number seven is just pass a freaking extension to the debt ceiling. This is the most hopeful option. Option number eight is a government shutdown where veteran payments and federal services like parks and maybe the TSA shutdown.

Option number nine is suspend the debt ceiling altogether and then option number 10 is just the nuclear option which is default. This is very bad. You would want to check out my paid sponsor which is life insurance in as little as five minutes that you can get and Apple pay or Android pay for in as little as five minutes. Super easy.

You just go to Met Kevin.com Life M-e-tkevin.com Life Super simple. Check it out. Very bad though. Everything plummets in value and you will not want to own anything probably other than gold in this sort of scenario.

Now, of course that's not personalized. Financial Advice for you. Even though I'm a financial advisor, just saying, we have to evaluate the odds of this actually happening. Now None of these sound like great options other than actually passing the debt ceiling.

and we certainly don't want to gamble with American lives and employment. And even though everybody is frustrated that we have an unsustainable government expenditure path, uh, this is probably not the time to try to solve every single solution of all the spending that's happened over the past few years, especially since we're in pretty dire economic. Straits Right now, we're either in a recession or just got out of a recession or going into a recession. So really for me, I look at this debt ceiling crisis as really good political posturing.

It's a really good opportunity for politicians to get on mainstream media and get attention and show their voting base that they're working hard for their constituents. But Ultimately, I Think there's a 98 chance the debt ceiling is going to get extended or we will kick the can down the road and then we'll extend it. It's happened in the last 78 times we've never defaulted. Defaulting would be disastrous I am not positioning my portfolio in any other way whatsoever.

I'm not buying gold I'm not at all concerned that we are actually going to default. Default is not an option America Is not a deadbeat Nation It is a great way for the mainstream media to get eyeballs. It is trending on every new source. Everybody wants to know what the heck is going on.

Everybody wants updates on this. But the reality is providing the straight scoop that the reality is: nothing's probably likely to happen and the debt ceiling is probably going to get extended. In fact, the debt uh, ceiling X date of June 1st in 21 days might honestly be a political trade anyway. Janet Yellen comes up with that at the treasury Department And if she says the X date, you know other words, the date that we actually run out of cash.

We've already technically hit the debt ceiling, but we play games and we haven't run out of cash yet. That X date might be later, but it's a perfect way to kind of condense the negotiation. And sure, if you look at the Congressional calendar, you look and say, look, we got 21 days left of those 21 days left. What do we have? We've got 15 sessions where Congress is actually available.

Of those only on seven days is Congress both the house and the Senate available the same day. So we have a very, very, um, let's say tight time frame. But again, that tight time frame just gets more eyeballs on mainstream media and it's kind of what the media wants. It's exactly what politicians want and ultimately, we're not going to default.

I Can't guarantee that obviously I just don't see it happening. I See this as political posturing and jargon. It's again, a great way to get views on social media for politicians on the mainstream Media or otherwise. but this is going to get extended like it has in the past.

If I'm wrong which I could be, then I'm going to get financially punished. But then again, so will absolutely every American And that is absolutely stupid and mind-blowing I Can't imagine it happening. So that's my take on the debt ceiling. Hopefully you found it helpful.

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