Could be so massively bankrupt, says Bill Bonner.

"We have a mountain of debt... nearly $100 trillion of it... every penny of which is counted as an “asset” on the creditors’ balance sheets. Probably only about half of it is ‘money good.’ The rest may go ‘poof’ in the credit cycle’s downturn.

The safest part of this pile is US Treasury bonds. And yet, in gold terms, we’ve seen that they lost 30% of their value in the last four years... and 75% since 1999.

And we have a GDP that is largely fraudulent... with as much as half of it directed, controlled or be-muddled by government, rendering it unfit...

It’s not just Treasury bonds that pretend to have value they don’t actually have. All across the fixed-return world, there are unrecognized losses and make-believe wealth.

Here’s the FDIC warning:

'Unrealized losses on available-for-sale and held-to-maturity securities increased by $39 billion to $517 billion in the first quarter. Higher unrealized losses on residential mortgage-backed securities, resulting from higher mortgage rates in the first quarter, drove the overall increase. This is the ninth straight quarter of unusually high unrealized losses since the Federal Reserve began to raise interest rates in first quarter 2022. '

Banks were required to hold US Treasury bonds as ‘reserves.’ That, they were told, would make them more antifragile. But it did just the opposite. Treasury bonds proved to be a terrible form of ‘reserve.’ They went down, in nominal terms, by about 20% since 2020. In gold terms, they lost half again as much.

The banks also had plenty of private debt that went bad. They lent heavily to real estate developers and speculators, for example. But now, commercial real estate is not worth what it was a few years ago.

In addition to the loan losses, there are the losses on the collateral itself. Green Street reports that the ‘all-property commercial index’ is down more than 20% since 2021."