Blain’s Morning Porridge August 7th, 2026“Debt to GDP is a distraction – ask how it got so high and look at system to understand its’ fragilities.”The real strength of the US economy is not its military or the dollar’s exorbitant privilege, but the depth of its capital markets - which have financed the most successful economy in history. The risk is not how large the US deficit is, but how sustainable are America’s capital markets to mounting fiscal pressures, market shifts and geopolitical forces?LINK TO PODCASTKEY TAKEAWAYS:$40 trillion of National Debt is not the problem. It’s a symptom of government.The strength of the USA’s capital markets allowed the economy to overcome traditional debt/GDP hinderances to growth.Ultra-low interest rates distorted financial asset markets leading to changed market psychologies such as risk appetite for speculation.The market is less experienced and resilient than it thinks.US Treasuries underly the strength of the capital markets – but are increasingly vulnerable to geopolitical events, changing global trade and the dollar.There is a growing danger diminishing political credibility will impact confidence in capital markets.Sometime in the next few days the USA’s national debt will smash through $40 trillion dollars.You can read the Morning Porridge by subscribing on ⁠www.morningporridge.com⁠, and have it delivered fresh to your inbox every morning!

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“What did the council decide on item 42?” — answered with the speaker and the moment.

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