usdebtrisk

💵 $40 trillion U.S. debt — not an automatic collapse, but a serious signal

I noticed a new milestone: U.S. government debt has exceeded $40 trillion for the first time. At the same time, 30-year Treasuries were rising above 5.3%, which means it’s becoming more expensive for the government to refinance the debt.

For me, the main risk here isn’t the $40 trillion figure itself, but a possible spiral: higher debt → higher interest costs → a larger deficit → new borrowing → the need for higher Treasury yields.

Meanwhile, it’s too early to talk about the inevitable “collapse of U.S. government debt.” The U.S. borrows in its own currency, and the Treasury market remains one of the largest and most liquid markets in the world.

That’s why I would watch not only the size of the debt, but above all long-term Treasury yields, inflation, the deficit, and the cost of servicing the debt.

These indicators can have a much bigger impact on the dollar, gold, stocks, and crypto markets than the round $40 trillion number itself.

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#UsDebtRisk

🇺🇸 US Debt Nears $39 Trillion

This isn't as new as some might think. The debt-to-GDP ratio already exceeded 100% in 2020 during the COVID-19 pandemic, reaching approximately 126%. It continued to rise, projected to reach around 123% in 2025, before declining slightly to approximately 101% in 2026.

In my view, the market isn't as surprised by the size of the debt itself as it is by the rate of its increase. As borrowing increases, bond issuance increases, and if demand doesn't keep pace, yields tend to rise to achieve equilibrium.

This directly impacts asset classes: higher yields put pressure on stocks, especially growth stocks, while simultaneously providing temporary support for the dollar. Conversely, assets like Bitcoin and gold tend to benefit during times of anxiety and uncertainty.

The issue isn't simply exceeding 100%, but rather the trajectory of the debt and the persistent deficit. Any surprises in inflation or weak demand for bonds could quickly reprice the markets.

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