US Dollar Faces Decline as National Debt Hits 36.60 Trillion

Macro strategist Luke Gromen has cautioned that the US dollar is set to continue its decline in value as the national debt reaches an unprecedented $36.60 trillion. Gromen posits that the US government is now compelled to make a critical decision: either sacrifice the bond market or allow the dollar to depreciate to uphold financial stability.

In a recent YouTube update, Gromen elaborated that the US, along with other major economies like Japan and the UK, is confronting a similar predicament. The macro expert anticipates that the US government will ultimately resort to debasing the dollar by increasing the money supply to manage its debt, rather than allowing Treasury yields to surge to attract investors. This approach, according to Gromen, is necessitated by the need to avert the dire consequences of skyrocketing interest rates, which could result in the collapse of both the bond market and the currency.

Gromen's analysis underscores the delicate equilibrium that governments must maintain between managing debt and preserving the value of their currency. He contends that permitting interest rates to rise unchecked would eventually lead to hyperinflation, as the cost of servicing the debt would become unsustainable. This scenario would compel governments to print more money to meet their obligations, further devaluing the currency.

Gromen's predictions carry significant implications for investors, particularly those holding assets denominated in US dollars. His view is that the current high levels of debt make it inevitable that governments will choose to sacrifice the currency rather than the bond market. This perspective is supported by the recent performance of gold and Bitcoin, which Gromen sees as safe havens in times of currency debasement.

Gromen's warnings highlight the broader economic challenges facing the US and other major economies. As debt levels continue to rise, governments are increasingly forced to make difficult choices that could have far-reaching consequences for financial markets and the global economy. Investors and policymakers alike will need to navigate these challenges carefully, balancing the need for economic stability with the risks posed by high levels of debt.