Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
The world is staring down a $91 trillion debt crisis, roughly the size of the entire world economy. The United States accounts for over one-third of this massive number with a $35 trillion national debt. However, a host of major economies such as Japan, France, Germany, and China are also buried under massive debt burdens.
The Numbers
- Global government debt stands at $91 trillion, nearly the size of worldwide GDP.
- US debt hovers over $36 trillion and grows $1 trillion every 100 days.
- The US spends nearly $1 trillion on interest payments for its debt.
- The Congressional Budget Office expects US debt to reach 122% of GDP in 10 years.
Why Investors Should Care
In today’s globalized economy, the fallout from worldwide debt could have serious repercussions for individual investors. Domestically, rising debt means higher inflation, increased living costs, asset depreciation, and the erosion of retirement accounts. On a global scale, investors are threatened with geopolitical instability and de-dollarization. Now is the time to start derisking your portfolio to protect your wealth from the imminent pitfalls of the looming debt crisis.
Market Impact
Regardless of what politicians say, debt has downstream consequences. Investors are drowning in a rising tide of higher inflation, interest rates, and living expenses. These economic obstacles take a toll on the traditional markets that investors rely upon for wealth preservation and growth. At the same time, gold has seen record demand from central banks and retail investors looking to safeguard their wealth from economic pressures.
Expert Insights
Experts from across the economic spectrum are frantically raising alarm bells over the impending debt bubble.
The International Monetary Fund – the world’s foremost financial institution – urged the US to address its “chronic fiscal deficits.”
Tragically, these warnings fall on deaf ears as politicians fail to address the issue, regardless of party affiliation.
“Many are not willing to talk about the hard choices that are going to need to be made,” explains Karen Dynan, former US Treasury chief economist.
Steve Rand, Scottsdale Bullion & Coin Precious Metals Advisor, points out how gold prices are responding to the surging debt.
“Big banks are all seeing the price of gold going much, much higher. This [debt] problem isn’t going away anytime soon.”
What’s Behind the News?
There are plenty of factors contributing to the global debt crisis, but the bulk of the blame lies at the feet of the Modern Monetary Theory (MMT). This fringe theory became the de-facto fiscal policy of the global economy after the US adopted it. Under MMT, governments don’t shy away from accumulating debt as spending is viewed as the solution to every problem. Unprecedented pandemic-era spending propelled already high debts into the stratosphere.
Future Outlook
The economic hammer is going to fall on investors. That much is certain. If the government decides to tackle the debt problem, everyday Americans are looking at higher taxes, increased interest rates, and other austerity measures. The situation is even worse if politicians maintain their ignorance-is-bliss approach. A debt default could destroy the US dollar’s world reserve currency status, leading to a steep drop in value. While traditional markets head down, experts anticipate gold prices to move higher as investors look for safe places to park their wealth.
Actionable Takeaways
Diversify Your Portfolio
Now more than ever, diversification is key. Gold can be a solid hedge against the risks that come with rising global debt.
Keep an Eye on the Economy
Stay informed about debt levels, inflation rates, and central bank moves. They’ll be crucial in shaping the market and informing your investment decisions.
Talk to an Advisor
Gold is most effective when it reflects your overall financial strategy. Speaking with an expert can help you find the right assets to optimize your investments.
Want to Learn More About Investing in Gold?
The precious metals advisors at Scottsdale Bullion & Coin are here to help you navigate these uncertain times. Give us a call at 1-888-812-9892 or use our live chat function to get personalized advice on how gold can help you secure your financial future.