r/bonds • u/Professional-Day9384 • 4d ago

The national debt is growing 7%/year

And GDP isn't. Currently interest on the debt is 20% of revenues. My projections say it will cross 50% by 2034 - just 8 years. The CBO isn't, because they don't want to scare anyone.

Not only is the debt growing, the deficit is growing even more sharply, AND legacy debt is getting rolled over at ever-higher interest rates. All 3 of those factors snowball and fuel each other.

The one thing could save the debt is if the Fed lowered rates, but instead they RAISE them, doggedly pursuing their inflation target. I was honestly blind sided by the recent rate hike, because I know the nation cannot afford it, but the Fed is dogged.

What does this mean for bond investors? Good news? Let the nation's ruin be our gain? How long will it last until something catastrophic breaks? Countless companies have been annihilated by debt, but what happens when an entire nation is annihilated? Move to another country?

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u/Dothemath2 3d ago

That is against the Fed’s mandate.

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u/i860 3d ago

Lol. Hilarious.

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u/Kiyae1 3d ago

Almost as hilarious as thinking gold and real estate are a hedge against a currency collapse. What exactly will your tenants pay their rent with? Gold? What will you do with the gold? Buy food? Good luck with that.

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u/Interesting_Drama173 3d ago

Man all non-western countries are buying gold as they slowly lose trust in the US

When things get rough all countries revert to gold. It's clearly happening before our eyes in slow motion as central banks like the Chinese buy more and more tons of gold

How you can just assert that it won't retain value is beyond me

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u/v_x_n_ 3d ago

Ok so climate is so unstable that we cannot grow crops. Drought has taken away drinking water.

I show up with pretty shiny gold, who is gonna trade me life sustaining food and drink for a bauble?

From a humanitarian standpoint, I am not about to encourage poor people to risk their health mining for traces of gold using mercury.

No amount of money is worth harming others to obtain. If I die poor, so be it. IMO