Dear Reader,
This hurricane season is really bringing to light the growing cracks in our nation’s foundation.
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Many of you, like me, own your own home.
And the past couple years when you’ve gotten your insurance premiums for renewal, you’ve probably, like me, opened them up, looked at them, and said, “OMG, it’s gotten so expensive!”
It’s like a slap in the face how high insurance premiums have become.
Now, because insurance premiums are so expensive, a lot of folks haven’t been able to afford insurance. Whether it’s home insurance and/or flood insurance, they’re underinsured.
A lot of underinsured folks got hit hard by Hurricane Helene. And they’re probably going to get hit hard by Hurricane Milton this week.
Now, that’s one side of the problem.
The other side of the problem is, to make insurance more affordable for the most people, insurance companies have also gutted their policies.
It’s been widely reported lately that a lot of people who were able to “afford” their insurance didn’t read the fine print…
The insurance companies wrote in a lot of exceptions and took away a lot of coverage leaving people underinsured without their realizing.
Now, as we’ve talked about, the United States has a lot of debt.
And we’re headed into a debt crisis.
I’m not the only one ringing the bell on this…
Jamie Dimon, CEO of JPMorgan Chase, and many other wise people have been warning about this in recent weeks and months.
So how can hurricane season create or exacerbate a debt crisis? And what does that mean for you?
Right now, nobody really worries about coming out of pocket to rebuild a house that gets knocked down in a hurricane.
(Thankfully, because there are bigger concerns for your life and the lives of your loved ones when a worst-case weather scenario plays out).
We don’t worry about personal financial ruin after natural disasters because everybody knows the federal government is a kind of backstop.
We all have that sense of security in the back of our minds that the federal government will declare a disaster area and basically take care of most of the damage if not all of it.
Now, as the United States gets higher and higher in debt, that will limit its ability to do that.
We take for granted that the government can take care of us when a natural disaster occurs.
But we are not that far away from a situation where the U.S. government might not be able to afford take care of a problem like this when a disaster comes.
That’s because we do this by debt – by selling debt to investors.
As I explain in Midnight in America, exactly one year ago word began to leak on Wall Street that the U.S. government was having trouble borrowing money.
Investors have basically said, “you guys have too much debt relative to your GDP.”
So that’s a very, very big problem.
Now, some folks might say, “well, you know what? If you can’t afford insurance, it’s too bad for you. I’ve taken care of myself. I’m a self-made man. I read my insurance policy, and I was able to afford it.” And that’s great.
But, let’s face it…
If the government can’t borrow money to pay for these crises, what happens?
Well, the government would try to pay for them somehow.
And they would pay for them by printing money.
If that happens, we’ll see CRAZY inflation.
And that will affect even the people who can afford to fully insure their homes.
Point is, we have one foot in the grave and the other on a banana peel when it comes to our nation’s debt.
As we wade through this hurricane season, I’m thinking about this.
If the government can’t sell debt to raise money to pay for these disasters they will print money. And printing money causes inflation. And inflation causes political instability.
Never forget:
The fertile ground for communism is war, inflation, unemployment.
And, of course, the wealth gap.
These are the things that allow communism to spring up.
In this country, right now, we have such a big wealth gap that interest in communism is already growing in the younger generation.
Add all these things together and we could see a lot of political turmoil.
People much wiser than me, our elders, really, have been warning us about this in recent months. And it pays to listen.
Now, I want to close with a plea to you.
If you’ve seen the news, I’m sure you’re aware of the awful situation in North Carolina.
One of our readers from the area has shared with me what he says is the best boots-on-the-ground charity for the victims of Hurricane Helene.
Here at Behind the Markets we are donating to this and I invite you to join me.
Here is the link: https://www.samaritanspurse.org/article/pray-for-those-in-helenes-path/
I hope you can help.
Have a wonderful day.
“The Buck Stops Here,”
[Managing Editor’s Note:]
Dylan talks about the many cracks threatening our nation’s foundation in his documentary, Midnight in America.
Hurricane season doesn’t even crack the top 10.
The first domino has already fallen…
Here are three more sectors that are set to fall in the next six months.