Wall Street threw a big, old fashion gridlock party today. Think “The Great Gatsby.” Black ties, champagne, flapper dancers, caviar… the works.
Truth be told, I’m more an American Legion kinda guy. I’ll sip my rye whiskey at home, thanks.
But in New York City, the Dow Jones Industrial Average soared roughly 1,500 points higher Wednesday after Democrats seized control of both the House and the Senate in Tuesday’s midterm elections. It was the Dow’s best day since April 2025.
The thinking on the trading floor goes like this: a divided Washington can’t spend money. Gridlock equals fiscal discipline.
I’m telling readers to put down the champagne… because Wall Street is celebrating the wrong thing.
What happened last night didn’t fix America’s debt death spiral. It set a trap, and when it snaps shut the bill will come due for every American.
Chuck Schumer Had a Great Day
Democrats flipped at least seven Senate seats Tuesday night: Kansas, Iowa, Texas, Ohio, Maine, North Carolina and South Carolina. Kansas hadn’t sent a Democrat to the Senate in nearly a century.
Mississippi and Alaska may soon follow.
Donald Trump is now the first president in 20 years to lose both chambers of Congress in a midterm.
Now look at your calendar.
The federal government funding dries up Dec. 11, thanks to a stopgap bill that self-interested politicians in Congress passed in September to get themselves safely past Election Day.
The lame-duck Congress returns Monday. Rep. Schumer will be strutting back in proud as a peacock with a binder of wishes and wants… none of which will be a plan to drastically cut spending and pay down the federal debt.
Currently, the U.S. federal debt limit sits at $41.1 trillion, and our debt total will reach that in just months. No one has reduced spending in decades. I wouldn’t trust this new Congress to break that pattern any time soon.
No one has bothered to even slow the spending. Projections show Washington set to blow through the debt ceiling (again) in early to mid-2027… just as Democrats take the gavel.
Democrats have every incentive to make Trump own the next shutdown and the next debt-limit standoff heading into 2028. Republicans, licking their wounds, will suddenly pretend they care about the debt again. Trump, already unpredictable, will veto whatever Speaker-in-waiting Hakeem Jeffries sends to his desk.
We already went through three shutdowns, including a 43-day lockout, the longest in American history, and a Homeland Security shutdown that dragged from Valentine’s Day to the end of April.
That was with Republicans in charge of the House, Senate, and White House.
Imagine what happens when an angry Trump is asked to share with Democrats… who just won by vowing to fight him on everything.
"Yeah, But I Won't Be Here"
Here’s the real, honest truth: Neither Trump nor the Democrats care about addressing the debt death spiral.
In December 2018, Trump’s advisers had warned him the national debt was heading toward a crisis. His reported answer?
“Yeah, but I won’t be here.”
A few weeks later, his acting chief of staff, Mick Mulvaney, was asked why an upcoming Trump speech said nothing about the debt. His answer: “Nobody cares.”
Call it “fake news” if you want. But the national debt was about $21.8 trillion back in 2018.
Since then, it has nearly doubled.
Forget about the Department of Government Efficiency and the big promises to slash federal spending. Washington has added $2.39 trillion in new debt in the past twelve months alone.
That’s $6.55 billion of new federal borrowing a day, every day.
Believe it or not, even the investing class that spent Tuesday popping champagne bottles has become concerned. The free money is starting to dry up, and the average interest rate on new federal debt has more than doubled, from 1.47% to 3.52%, over the past five years.
Recently, Republicans and Democrats signed off on yet another $5 trillion debt limit hike after the last shutdown in 2025.
They had to get past election day, after all. So, they again reached the bipartisan conclusion that kicking the can down the road was best.
Now two parties that agree on almost nothing will be forced to share the nation’s credit card that is nearly maxed out.
Does anyone believe they’ll agree to spend less?
Gridlock Won't Slay the Interest Monster
Wall Street’s theory is that a divided government will keep a lid on borrowing. The 10-year Treasury yield slipped about 6 basis points to 4.9% today on that hope.
But a 4.9% yield on the supposedly “risk-free” asset of the entire planet isn’t a vote of confidence.
It’s the warning sign of a deadly monster: Come in… if you dare.
Because gridlock doesn’t cut any federal spending. Most of the federal budget – Social Security, Medicare, Medicaid, and interest on the debt – all runs on autopilot. That spending doesn’t need a vote in Congress.
A shutdown closes the Smithsonian museums and furloughs park rangers. It’s bad news to fifth grade field trips all across the Mid-Atlantic. But it doesn’t touch the debt spiral, and it doesn’t stop the interest monster from growing.
The Congressional Budget Office says that beast now tops $1 trillion a year.
What a standoff actually does is simply make lenders more nervous.
In 2011, Standard & Poor’s stripped the United States of its AAA credit rating after a debt-limit fight. Fitch followed in 2023, pointing to repeatedly common debt-limit standoffs. Moody’s joined them in 2025.
No one really thinks that a U.S. Treasury bond is the safest asset on earth anymore. When investors lose that faith, they demand higher interest rates to keep lending. Higher rates mean bigger interest bills. Bigger interest bills mean more borrowing.
Meanwhile, Schumer will eventually make a deal with Trump to ensure the spending will resume. The tap will turn back on, and everyone will think the river is flowing again.
Pop the bottles!
Cheers to the debt death spiral.
What The Talking Heads Didn't Tell You
Here’s what the CNBC talking heads glossed over today.
While the Dow rallied, gold climbed. Silver jumped. Mining stocks surged right along with them.
Investors who are truly at peace with Washington’s debt pile up don’t flee into metals on that same morning.
The ultimate consequences of Chuckie Schumer’s big Tuesday night won’t hit your portfolio tomorrow. They may not hit next month. They may not even hit next year.
But now we have a president and a Congress each daring the other to blink… and at some point, the endless funding fights, the park shutdowns, and ever-growing debt will come to a head.
The whole world will be watching to see how much longer America can still pay its bills.
We know Washington can print as many dollars as it wants. It can’t print gold or physical assets, which is what I value.
The federal debt belongs to all of us. But my assets belong to me alone.
Come and take it.
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byUnited States Gold Bureau