America’s national debt has surpassed $33 trillion for the first time in history, while interest rates are currently through the roof. Since releasing the debt ceiling in June, the U.S. has added about $1 trillion to its total debt. Mark Spitznagel, founder of hedge fund Universa Investments warns The “biggest credit bubble” in human history.
US debt is going through the roof
Chairwoman of the Committee on a Responsible Federal Budget, Maya Mackinas, said: “America is reaching a new milestone that no one is proud of; Our national debt has surpassed $33 trillion.
On June 3, President Joe Biden signed legislation to suspend the US debt ceiling until January 2025. That means there will be no new US debt ceiling until that date.
Over the past five years, the United States has added $11.5 trillion in total debt. Also, the country is on track to pay $1 trillion a year in interest costs.
After all, we should not forget that the US Federal Reserve has raised interest rates massively in recent months. “Interest will be the US government’s largest near-term expense. How does that turn out well?” asks Copissi Letter on Twitter (or X).
The Finance Ministry was not concerned
Janet Yellen, the current US Treasury Secretary, is not concerned with these giant numbers. “The metric I look at most to assess our situation is interest costs as a percentage of GDP.” Thus Yellen to CNBC.
Ultimately, though, it’s also important to look at real interest costs, which are quickly approaching $1 trillion a year (see graph above).
For that reason, it is important for the US that interest rates set by the central bank come down soon. In that sense, Bitcoin is in good shape for the long term.
Bitcoin does best in an environment where interest rates are low and money creation is high. More money is circulating, more people are looking for alternative forms of scarcity, and then a maximum of 21 million bitcoins will be attractive.
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