The U.S. has reached $36Tn of national debt. The pace continues to be around $1Tn of additional debt every 100 days. And the budget deficit is topping $2.2Tn per year. With this balance sheet, the ratio of debt to gdp is 123%. These are the numbers behind the rally of Bitcoin and gold during 2024. These are also the numbers behind the pickup in inflation that we are witnessing. And if this trend continues, it wouldn’t be surprising to see the rating agencies lowering the rating of the U.S. debt or placing it under watch. That’s why the new administration is focusing on reducing government spending and increasing efficiency to increase GDP growth and dilute the debt. We still don’t have details on how it would be done and what would represent to the overall financial picture of the country. It’s difficult to see lower taxes in the near future, and it’s not clear if it would be enough to move the needle. If this scenario continues, we may see a continuation of the rally in bitcoin and gold.
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