Light Wave


US debt piles up at $1 trillion per 100 days: Bank of America

By Jake Beardslee · March 1, 2024

In brief…

  • US accumulating debt rapidly, around $1 trillion every 100 days
  • Gold, bitcoin at near record highs as hedges against dollar devaluation
  • Warnings debt flood could diminish demand for Treasurys
  • Interest costs may soon exceed defense spending
  • Debt battles in Washington stir shutdown fears
The astonishing speed of US debt accumulation is breathing new life into investments that offer protection against a potential slump in the dollar's value.  Martin Falbisoner/Wikimedia

The ‘debt debasement’ trade is gaining momentum as the US government accumulates debt at an astonishing pace, taking on around $1 trillion every 100 days, according to Bank of America strategists. This amounts to approximately $3.6 trillion per year, with much of the spending going towards “domestic bliss” and military activities overseas, which have accounted for 9.3% of GDP over the past four years.

As a result, assets seen as hedges against dollar devaluation like gold and bitcoin are nearing all-time highs. Gold recently edged up to around $2,081, a 6% gain over six months, while bitcoin touched $61,000, its highest since November 2021 and up 50% in 2024 alone, according to Business Insider. Bitcoin’s climb has been attributed to factors like the approval of spot ETFs and an upcoming “halving event.”

Analysts caution that the overwhelming surge of US borrowing threatens to reduce appetite for Treasury bonds as the massive supply overwhelms buyers. At the same time, the snowballing debt obligations make interest expenses more costly with rising rates. Projections indicate interest payments on the debt could eclipse defense expenditures to become the second biggest item in the federal budget within five years.

The soaring national debt has stoked market fears as lawmakers feud over budget cuts, raising the specter of a devastating partial government shutdown next month.