Daily Brief – US Debt Solutions

US Debt Solutions

With the USA spending USD 1 trillion per annum on servicing a debt mountain of USD 40 trillion, unless there is a drastic cut in spending or and a drastic increase in tax revenues, it can only get worse. In 1961 in Operation Twist the US artificially depressed the steepness of the yield curve; further back in WW2 the US capped the yield on Long Bonds. Such measures serve only to paper over the cracks rather than properly address the underlying issues. While the ostrich approach has been adopted in recent years, as a strategy this is now looking increasingly unrealistic and the USA is heading towards making hard choices before the markets make those choices for the USA.

EUR/USD 1.1247.

Top Intl Retirement Destinations

In past years, the Top 10 best places to retire would have been dominated by European countries. These days the top two are Uruguay and Mauritius closely followed by Paraguay and Costa Rica. Spain and Portugal feature and lower down Greece, Latvia, Italy , Andorra and Greece all vye for attention. Quality of Living might disqualify some of those despite the attractive low rates of taxation, but accessibility of passports and their international acceptance might give pause for thought. Inevitably , it is where you hail from that will determine where you might retire: visiting the grandchildren in Essex is far from easy if you live in Montevideo, Uruguay.

GBP/USD 1.3245.

US Dollar

Paradoxically, high Oil prices, likely higher US interest rates , the strong US economy and its enduring safe haven status in times of uncertainty all add up to a strong USD. The paradox is that if the ever growing AI bet through the US equity market fails to deliver, the USD suddenly looks fragile . Whatever markets feel about that, they will need to get used to a higher level of volatility and larger currency swings. Helmets on.

Brent Oil USD 98.42.

Admission Charges

When it comes to being a tourist interested in visiting the top UK Christian sites, it requires deep pockets: St Paul’s Cathedral £26, York Minster £20 and now St Giles Cathedral, Edinburgh founded in 1124 £12. Given the costs of maintaining these hugely impressive historical religious icons, it is looking increasingly unrealistic for them to be places which can be visited gratis, but here’s hoping that the Churches of England and Scotland do not spoil the market.

GBP/EUR 1.1770.

Karma Chameleon

Accident prone Culture Club frontman and larger than life singer Boy George reported a burglary by calling the emergency services in NYC this day in 2005. This turned out to be a bad move for Boy George-there was no break in- but the police did find a quantity of cocaine. Upon him being arrested ,NYC’s finest were unsure what to do with Karma Chameleon-like BG, but having been taken to court, a similarly bemused judge sentenced him to community service involving sweeping the streets of New York for 5 days.

There’s a loving in your eyes all the way
If I listened to your lies would you say

I’m a man without conviction
I’m a man who doesn’t know
How to sell a contradiction
You come and go
You come and go

Karma Karma Karma Karma Karma Chameleon
You come and go
You come and go
Loving would be easy if your colors were like my dream
Red, gold and green
Red, gold and green

Didn’t hear your wicked words every day
And you used to be so sweet I heard you say

That my love was an addiction

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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