Financial Expert Says Trump Is Closer To Bankruptcy Than You Think

According to a market economist and financial expert, Donald Trump is probably way closer to bankruptcy than any of us think. The former president had stated in a deposition that he had about $400 million in liquid assets, not including properties, and that doesn't even come close to covering the more than $500 million he owes in judgements against him. But the expert says that this number is also misleading, because Trump can't just spend every single penny he has, even if it is for legal reasons. Ring of Fire's Farron Cousins explains what's actually happening.

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*This transcript was generated by a third-party transcription software company, so please excuse any typos.

So it's no secret that Donald Trump is obviously facing some pretty significant financial problems right now. He owes a grand total of $542.3 million in the multiple legal judgments against him. That is of course the New York Fraud trial, the first Eugene Carroll judgment and the second Eugene Carroll judgment, which for the record, he did pay the bond on that, but he didn't actually pay the bond yet. He secured the bond from the insurance company, but he hasn't actually given them the money. So that's an interesting little tidbit. But more importantly, according to a market economist and financial expert, Donald Trump is actually closer to bankruptcy than most people would think. And let me read you what he has to say here. Uh uh, this individual John Gabrielson, Atlanta based market economist, spoke to Newsweek this week and let them know first of all that reporters, journalists, hell, even people like me, we're all getting it wrong about Donald Trump's liquidity.

Now we know that Donald Trump is worth, according to, you know, estimates, real estimates not Trump's estimates about $2 billion and at least 75% of that is actually tied up in property. So it's not liquid. You would have to sell it to get the cash for that to be liquid. Trump told Letitia James, I believe it was, or perhaps it was a different deposition, whatever, uh, that he has about $400 million cash on hand. Okay? So he has 400 million, but he owes 542.3 million. Obviously he can't pay that, but as this market economist explains, that's not actually how it works. Trump has less on hand then that 400 million, even if he has 400 million cash on hand. So how can that be? Here's how Gabriel sin explains it. You are not bankrupt when your balance hits zero. You are bankrupt when your balance falls below the amount of float you need in order to continue as a going concern.

A company cannot pay out down to a balance of zero and continue as a going concern. It has a large daily cash drain to pay ongoing expenses requiring some amount of float or minimum balance to be maintained. So that $400 million that Trump has, he can't pay all that is what Gabriel sin is explaining. He can only pay part of it because if he drains it all the way down to zero, his company immediately shuts production gone, done forever. Because he no longer has the money to keep the lights on. He has no longer has the money to pay people. So that 400 million

Is likely a lot less because he has to have that reserve in there because without that reserve, the company immediately shuts down. So based on that analysis on how the finances actually work, which this opened my eyes 'cause I didn't realize that I'm not a business guy, but yeah, turns out Donald Trump has actually a lot less money than we think and maybe much, much closer to bankruptcy than any of us had believed.