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| By Jim Nelson |
While all eyes have been on tariffs over the past two months, a new international capital proposal could cause even more problems.
Our Safe Money expert, Nilus Mattive covered the main problem with President Trump’s “Big Beautiful Bill” on Monday.
He wrote:
“There’s pretty much something for everyone in the big, beautiful bill.
“That’s also the problem.
“Because there’s no way the big, beautiful bill won’t also make the U.S. worse off financially.
“Most estimates peg the specific number somewhere between $3 trillion and $4 trillion — adding another 10% to America’s existing $36 trillion national debt.”
Juan Villaverde followed up with similar concerns, as well as a way to benefit from this exploding debt:
“This amounts to a compelling vision of a long-term crypto bull market:
- A profligate U.S. Treasury continues spending money like a drunken sailor on shore leave.
- The Fed monetizes the damage to prevent a U.S. Government default.
- Bitcoin (and other crypto assets) soar into the stratosphere.
“Crypto’s four-year cycle peak may be due in a few months.
“But the bull market won’t wind down in 2025. It’s set to keep running — until governments stop printing money to paper over their mistakes.”
But the “BBB” poses another problem for U.S. debt beyond just increasing it.
It might also directly make that debt more expensive.
Section 899: Enforcement of Remedies Against Unfair Foreign Taxes specifies that “foreign persons of discriminatory foreign countries” will pay additional taxes on U.S.-based income.
This could include any individuals or companies located in countries that have specific taxes on things like e-commerce from U.S. businesses.
According to CNBC, that includes France … and soon, potentially Germany:
“France, for instance, has a 3% tax on revenues from online platforms, which primarily targets big technology firms such as Google, Amazon, Facebook and Apple. Germany is reportedly considering a similar tax of 10%.”
But what about the U.S. debt?
Well, that means companies and individuals in these “discriminatory foreign countries” would face a tax — starting at 5% and increasing each year — on interest from U.S. Treasury bonds.
According to that CNBC article, that could cost investors in France and elsewhere up to 100 basis points of lost income from Treasury bonds.
That’s enough to move to other government debt, like German bunds.
At a time when international investors and governments are already fleeing U.S. debt markets, this could add fuel to the raging fire.
Of course, there are solutions. Your experts have them all lined up for you …
Gavin Magor takes you inside Weiss Ratings Plus. With this new tool, you can research specific countries to protect against the geopolitical and global economic fallout from tariffs and taxes.
The Debt Monster That’s Eating Tokyo!
Speaking of global taxes, Sean Brodrick is following a major story. “A Godzilla-sized monster was about the stomp Tokyo.” That would be the island nation’s own debt problem.
Fortunately, Sean also has a solution to this problem that should make investors sizeable profits.
This AI Integrator Is Set to Double
Tech guru Michael A. Robinson is also looking overseas for ideas. He found one in an ignored AI giant located in Luxembourg. He says you can buy it for “mega growth at a discount.”
That’s it for this week. Have a great weekend!
Jim Nelson
Managing Editor, Weiss Ratings Daily
