An overview by Andrey Syrchin, CEO of Cresco Capital
What could be more global than the debt of the world’s largest economy, whose currency is a primary medium of exchange held as a reserve by every prudent family worldwide? Yes, I’m talking about the U.S. dollar!
I’ve often discussed the increasing national debt and currency printing. However, today’s world of high interest rates complicates matters significantly:
1. Countries worldwide are printing vast amounts of unbacked currency—Europe, China, India, not to mention the rampant inflation and devaluation in Africa and South America.
2. This is why surrogates like cryptocurrencies and meme coins are skyrocketing—there’s simply nowhere else for money to go!
3. The value of gold and silver has increased by 30% this year, which is astronomical. The market is anticipating a currency value collapse through commodities.
4. High interest rates are adding fuel to the fire, as corporations and governments need to pay interest on loans. Economic growth is stagnating, and subsidies and new loans are becoming necessary. I remember a time when billionaires were rare, but today there are families with hundreds of billions, and the world is on the brink of seeing its first trillionaires.
5. Officials from various countries are ramping up subsidies and debts, disrupting the system’s balance. This is why we see such growth in the stock market and a decline in the debt market. The wise are moving their funds into assets that can withstand these conditions, as Ray Dalio says, “cash is trash!”
Conclusion:
I won’t speculate on whether the U.S. can repay its debt—they can simply print more money, but then a loaf of bread might cost $1,000 at the store, and a jar of vitamins $10,000-$50,000. This is where we are heading: devaluation and persistent, powerful inflation. I’m not saying that we are headed for disaster, but expecting 4-7% annual inflation in your currency is now realistic. So, look for funds or assets that protect your money and consistently yield more than 5%, otherwise, you are at a loss. And yes, of course, I’m talking about returns in currency! In Turkey, the rate is 45%, but we all understand what that implies!