Bankruptcy Looming? Janet Yellen Admits US Finances Are Worse Than Third-World Nations
A statement has just been made that should be front-page news across the globe. Former Federal Reserve Chair and ex-Treasury Secretary Janet Yellen finally told the unvarnished truth during her remarks at the American Economic Association.
In a moment of rare candor, she admitted to the audience that US finances are effectively in worse shape than many third-world countries. Specifically, she stated that America's "needed belt tightening is significant—larger than in most programs supported by the International Monetary Fund."
Let that sink in. The International Monetary Fund (IMF) is the lender of last resort for bankrupt nations. When the IMF arrives, it usually means a country has lost its financial sovereignty.
The IMF Comparison: A Warning from History
To understand the gravity of Yellen's comparison, we simply need to look at the nations that have undergone IMF "rescue" programs:
- Greece (2010): Pensions were slashed by 40%, public wages frozen, and state assets sold off. The economy contracted by 25%, hollowing out an entire generation.
- Argentina: Despite the largest bailout in history ($57 billion in 2018), inflation ripped past 50% and poverty surged, decimating the middle class.
- Sri Lanka (2022): Fiscal mismanagement led to default. IMF-mandated austerity caused fuel and electricity prices to skyrocket, culminating in riots that stormed the Presidential palace.
When a figure like Janet Yellen states that the US needs a fiscal adjustment larger than these countries, she is saying the quiet part out loud: The US fiscal situation is catastrophic.
The Only Thing Keeping the US Afloat
Why hasn't the US collapsed like Sri Lanka? There are two critical differences holding the system together for now:
- A Productive Economy: The US still possesses a robust, innovative economic engine.
- The Reserve Currency: This is the ultimate luxury. If Sri Lanka runs out of money, they must beg the IMF. When the US runs out of money, it simply "prints" more.
And that is exactly what is happening. The Federal Reserve has quietly resumed buying Treasuries—expanding reserves and injecting money into a system where inflation is already climbing. But money printing only works as long as the world accepts your currency.
The Global Shift to Real Assets
Foreign creditors are not blind. They see the writing on the wall. Central banks around the world have been aggressively dumping US dollars and buying gold—a major driver behind the gold price surging over 60% last year.
"Foreign central bankers are not waiting around to see how America’s debt challenge plays out. They are diversifying into the only asset that has no counterparty risk."
The US government is running out of time. Yet, political gridlock and legal battles—like the recent inability to stop welfare fraud in Minnesota due to judicial interference—suggest that Washington is incapable of cutting spending.
Conclusion: Position Yourself for Safety
It is doubtful that Congress will suddenly grow a conscience and balance the budget. The most likely path forward is continued inflation to "inflate away" the debt, eroding your purchasing power in the process.
However, you can sidestep these risks. Real assets—precious metals, energy, and productive resources—hold value regardless of what politicians do to the dollar.
This is where the Spargold App becomes your essential tool. Just as central banks are securing their reserves with gold, you can secure your personal savings. Use the app to buy physical gold and silver easily and securely. Don't wait for the official admission of bankruptcy; position yourself in the assets that have survived every debt crisis in history.
Stay foresightful
Yours, Nils Gregersen
