Former Federal Reserve Chairman Paul Volcker said in a New York Times interview that he sees “a hell of a mess.”

Yes, there is a hell of a mess. 1) incredible overreach by The Federal Reserve and the resulting asset bubbles, 2) unsustainable spending and budget deficits by BOTH political parties, 3) unsustainable pension liabilities and healthcare promises. To name a few.

And perhaps the “hell of a mess” is finally being noticed by investors in the form of the crashing Smart Money Flow Index as The Fed normalizes interest rates after 10 years in the monetary wilderness.

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Budget deficits? The Federal government has been running budget deficits for a long time, but the deficits took an enormous leap during the financial crisis and subsequent tax cuts (no one in DC ever wants to cut spending).

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Like growth in mandatory spending (entitlements).

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Medicare (net of premiums) is the biggest culprit.

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Unfunded liabilities for the US are over $115 Trillion … and growing!

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And then we have the unsustainable Federal, state and local pension funds.

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So, Volcker is correct. The US is one hell of a mess, thanks to uncontrolled Federal spending and Federal Reserve policies.

It is as if Oscar, Kevin and Angela (the accountants) are minding the Federal government books.

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