Macro strategist Luke Gromen is predicting a devaluation of the US dollar, citing the nation’s massive $36.6 trillion national debt. He believes the government faces a tough choice: sacrifice the bond market or let the dollar fall.
A Difficult Choice for the US Government
In a recent YouTube video, Gromen explained that the US is essentially stuck between a rock and a hard place. Raising interest rates to attract investors and stabilize the bond market could cripple the economy due to the sheer size of the national debt. Higher interest rates mean higher payments on that debt, potentially leading to a situation where the government can’t afford to pay its bills.
The Likely Outcome: A Devalued Dollar
Gromen argues that the US government will likely choose the less painful (in the short term) option: printing more money to pay its debts. This, however, will inevitably lead to a devaluation of the dollar, essentially making it worth less. He points out that sacrificing the bond market only buys a little time before both the bond market and the currency suffer. The government, he says, will always prioritize the bond market over the currency when debt levels are this high.
Gold and Bitcoin as Safe Havens?
Gromen’s prediction is partly based on the current performance of gold and Bitcoin. He suggests their current market positions reflect investors’ anticipation of this dollar devaluation, seeing them as safer alternatives.
Disclaimer: This information is for general knowledge and discussion only, and does not constitute financial advice. Always conduct your own research before making any investment decisions.
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