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WesternSky's avatar

What would that do to the price of BTC and gold if the USA debt to GDP went to 85%? Isn't the whole narrative behind both is the USA in a unsolvable debt spiral right? And those two are the only life raft from a life of poverty and despair.

But of course, I will believe the 85% debt to GDP when I see it! :)

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Russell Clark's avatar

70s saw debt to GDP collapse and gold surge.... inflation is a typical answer to.a.debt crisis

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AD's avatar

Main reason for falling outlays:

Spending by the Department of Education decreased by $102 billion (or 50 percent), largely because spending for the Education Stabilization Fund and student loans was lower during the first nine months of 2025 than in the same period last year. In June 2024, the agency recorded an increase of $74 billion in the estimated costs of outstanding student loans. No such costs were recorded in 2025.

https://www.cbo.gov/publication/61303/html

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Russell Clark's avatar

Excellent work - I knew someone would know where to look

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CS's avatar

long term yields will matter to investors and if inflation heats up watch for 10y and 30y and we will have a Tru(mp)ss moment very soon, IMHO

turkey tried hard way to lower interest rates by 'executive order' and firing CB chair and backfired tremendously and that i s why turks buy gold/BTC to protect their wealth, something the US will have to learn the hard way, long gold/silver/miners...

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Russell Clark's avatar

Gold still looks good to me.

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Andy Fately's avatar

Thanks for a well thought out counter argument to the ongoing end of world analyses we continue to see. I ascribe a 25% probability to this outcome

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Russell Clark's avatar

Not well thought out... more simple extrapolation... let's see how it plays out

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Andy Fately's avatar

These days that counts as well thought out😂

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Russell Clark's avatar

I suspect the thought process was very similar! Trump is definitely a "change agent"

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Andy Fately's avatar

it is the 4th turning after all. somebody needs to force the change

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Tom's avatar

The USD was weak in the 70s but went through the roof in the 80s, but in your scenario, it would weaken less this time than in the 70s, no? That said, I would assume that if the metrics improve like you outline, Trump or whoever follows him will put through a massive tax cut so that a significant deficit remains to keep the USD from strengthening a lot.

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Russell Clark's avatar

Really depends on whether the tariff regime really drives investment into the US or not....

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