Why Bitcoin and Gold Are Benefiting From the U. S. Debt Crisis

Debt Exceeds GDP

The U.S. national debt has surged to $38.5 trillion, surpassing the country's GDP. This means the government owes more than it generates annually.

• Interest on debt alone exceeds $1 trillion per year.
• This amount is greater than the U.S. military budget.

Who Holds the Debt?

• Mostly domestic: Owed to U.S. citizens and institutions.
• Foreign holders: Includes Japan, China, and the United Kingdom.

Causes of the Debt Surge

• Pandemic economic response
• Long-term spending on infrastructure, defense, and social programs

Venezuela's Oil Reserves as a Potential Solution?

• Venezuela's oil reserves could theoretically cover a significant portion of U.S. debt.
• However, extracting and monetizing these reserves is complex and not a straightforward fix.

Impact on Financial Markets

• Low interest rates may be maintained to reduce debt repayment costs.
• Historically, low rates boost assets like Bitcoin and gold.
• Gold has already risen due to a weakening dollar.
• Bitcoin could follow in 2024.
• Bond market instability may force the Federal Reserve to intervene, further weakening the dollar and boosting asset values.