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.
Larry Fink, CEO OF BlackRock, recently warned the rising national debt would become a “big burden on the backs” of future generations if not addressed immediately. The leader of the world’s wealthiest investment firms underscored the need for economic growth and fiscal responsibility to climb out of the deepening debt spiral. His concerns expanded to the global debt crisis, too.
The Numbers
- US national debt is over $35 trillion and grows by $1 trillion every 100 days.
- The 2024 deficit is $400 billion larger than previous Congressional Budget Office estimates.
- Cumulative deficits between 2025 and 2034 are expected to be 10% larger ($2.1 trillion) than anticipated.
- The public debt-to-GDP ratio is forecasted to jump from 99% to 122% by 2034, surpassing record highs.
Why Investors Should Care
The ballooning national debt isn’t only a concern for federal policymakers; it has a direct impact on everyday investors. High debt levels can lead to economic instability, higher inflation, spiked interest rates, and currency devaluation, all of which erode the value of traditional investments. Savvy investors are recognizing a marketwide transition from conventional assets such as stocks, bonds, and treasuries to safe-haven assets. Precious metals such as gold and silver tend to increase in value during bouts of economic uncertainty. That’s why central banks and retail investors are scooping up physical gold in record numbers.
Market Impact
Fink’s comments focus on the incoming blow to future generations, but the national debt is already having disastrous economic consequences. The annual inflation rate is 2.9% – nearly 50% higher than the Federal Reserve’s target. General prices have soared over 20% since 2020. The personal debt bubble is exploding alongside the debt crisis, threatening the personal finances of millions of Americans. In response, gold prices have shattered multiple records over the past few months as investors seek protection from the economic fallout.
Expert Insights
In a recent interview, the BlackRock CEO warns that “these deficits are going to become a big burden…on the backs of our children and…grandchildren.”
Fink further highlights the rapidly rising costs of the debt, saying “The public deficits are just growing too fast as a percentage of GDP.”
His comments line up with similar warnings from fellow billionaire investors. Jamie Dimon, J.P. Morgan’s head, sees debt as the “most predictable” crisis in US history.
Elon Musk predicted that America would go bankrupt if it continues down this unsustainable path.
Even the Fed Chair Jerome Powell admitted it was “past time” to have an “adult conversation” about the US debt bubble.
What’s Behind the News?
The backdrop to these warnings is a costly combination of record-setting pandemic-era spending, a lack of political leadership to address the debt issue, and growing economic unease. People are rapidly losing faith in the government’s ability to rein in debt, preferring to place their wealth in safe-haven assets instead of the vulnerable market.
Future Outlook
US debt is a runaway train with no brakes and a disinterested conductor. The crash will likely land squarely at the feet of everyday Americans in future generations. US debt is expected to top $56 trillion in the next decade. At the same time, the debt-to-GDP ratio is forecasted to surge, making it harder to pay off the national debt. Many experts are raising their gold price predictions even following a massive rally as the debt issue continues to drive demand.