Macro strategist Luke Gromen warns that the US dollar will keep losing value amid a ballooning $36.60 trillion national debt.
In a new YouTube update, Gromen says the US, with its record-level national debt, is now forced to choose between sacrificing the bond market or letting the dollar fall to maintain financial and economic stability.
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According to the macro expert, the US government will ultimately resort to debasing the dollar by printing more money to manage its debt, rather than allowing Treasury yields to soar in an effort to attract investors.
“What we’re seeing in these bond markets, US and more importantly for the moment Japan and the UK, is a choice. You got to sacrifice your currency or you to sacrifice your bond market. And our view, really the base underpinning of our view why gold and Bitcoin are trading where they are trading, is they always choose to sacrifice the currency…
Because if they sacrifice the bond market and let rates just go up and up and up, given their debt levels, they ultimately end up sacrificing both: the currency and the bond market because higher rates drive receipts down and interest up and that means interest quickly goes above your receipts.
And when that happens, that drives essentially hyperinflation of the currency. Either they can’t pay the bonds and the bonds back the currency or more likely, they print the money just to pay the interest and drive a version of hyperinflation.
So they always choose to sacrifice the currency over sacrificing the bond market when debt levels are high as they are and that’s why, because sacrificing the bond market only buys them a little bit of time, and they ultimately end up sacrificing both.”
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