The United States has a huge and growing budget deficit. Even with an economy that is performing respectably, and with no major crisis such as a pandemic or a war to deal with, the deficit is expected to come in at close to 7pc of GDP this year, and will remain at 6.5pc next year.
The amount the US borrows every year has already gone over $2 trillion, and will hit $2.8 trillion by 2034 on current spending plans, while total debt as a percentage of output has surged.
These are unprecedented figures for what remains the world’s reserve currency. Under Biden, money has been spent on a vast scale on industrial and green subsidies, most of it in the form of tax credits that are open-ended.
Democratic presidents used to at least pay lip service to controlling the deficit, and Bill Clinton actually delivered a surplus, the last occupant of the White House of either party to do so. Those days are long gone. They don’t even pretend to be interested any more.
The message of Harris’s rapid elevation, and indeed of her likely victory later this year, is already clear. On her record, there is no possibility that she might try to reduce the deficit. Instead, she is far more likely to borrow even more.
The United States will continue on a path of fiscal and monetary recklessness that has no real parallel in economic history. In effect, the dollar will be debased, and debased again, until finally there is a reckoning with the vast deficits it is running up. It may well end up destroying the global monetary system.
There is only one real refuge from that: gold. Its bull run may be, in reality, the “Kamala Trade” – and it could take the precious metal a lot higher still.