- Porter's Daily Journal
- Posts
- The U.S. Will Default: It Always Does
The U.S. Will Default: It Always Does
Porter's Journal Issue #63, Volume #2
Porter Stansberry
June 02, 2025
How Government Defaults Destroy Real Wages… How To Protect Yourself
This is Porter’s Daily Journal, a free e-letter from Porter & Co. that provides unfiltered insights on markets, the economy, and life to help readers become better investors. It includes weekday editions and two weekend editions… and is free to all subscribers.
The coming U.S. financial reset… The bond market is broken, says Jamie Dimon… The gold standard kept debt under control… First FDR defaulted, then Nixon… Poor people have been lied to and stolen from… Ships have stopped coming from China… |
Table of Contents
Here’s some math that you might not like, but you’d better understand.
In only the last 20 years, per-capita federal debt has exploded by close to $100,000 per person – or about 300%. It’s likely to reach $150,000 per person by the end of President Donald Trump’s term in 2029.
There’s a growing likelihood (and I’d call it a certainty) that the entire U.S. financial system will have to be “reset,” because our government cannot afford these debts. If you doubt me, just ask yourself how many people you know that can afford their portion of the federal debt.
When JPMorgan Chase CEO Jamie Dimon talks about the bond market breaking (like he did last week), this is what he’s talking about: we can’t possibly afford these debts and, as a result, they are about to spiral out of control.
But don’t worry. This is normal. The U.S. government defaults about once every 50 years. And, this time, everyone knows it’s coming – because our debts have become so much larger than our entire economy.
In 1913, before America adopted the Federal Reserve system, the U.S. Treasury issued coins – gold and silver. Virtually all debts carried a gold clause, specifically calling for repayment in the precious metal. And banks had to keep large reserves (specie government bonds) to meet redemption demands.
This gold-backed system sharply limited the amount of money and credit, because, for the monetary system to grow, gold reserves had to grow too. Total credit was limited by these scarce reserves.