The ever-ballooning U.S. national debt is causing alarm bells to ring not only on Wall Street but also across the globe. With the debt surpassing a staggering $35 trillion mark in July 2024, experts warn of a potential crisis and the BRICS nations see an opportunity.
The speed of the debt’s ascent is particularly troubling. Data shows a jump of nearly $1 trillion every 100 days since March 2024. This follows a worrying trend in recent years, with the debt reaching new milestones at an accelerated pace.
While the U.S. government has shown some success in slowing down the debt growth, the current rate remains unsustainable. This raises concerns about the future of the U.S. dollar as the world’s dominant reserve currency, especially considering the ongoing interest rate dilemma and pressure from the BRICS alliance (Brazil, Russia, India, China, and South Africa).
The BRICS nations have long advocated for a multipolar world order, and a weakening U.S. dollar aligns with their goals. They have been actively exploring alternative reserve currencies and building their own financial infrastructure, potentially paving the way for a new global financial system.
However, the situation isn’t entirely bleak for the U.S. Recent efforts have slowed the debt growth compared to earlier periods, now hovering around $1 trillion every 7 months. While an improvement, the total debt has still grown by a staggering $2 trillion in the last year alone.
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One factor contributing to the rising debt, according to experts, is the recent increase in national defense spending. Ongoing conflicts in the Eastern Hemisphere, with financial support for Ukraine and Israel, have placed a significant strain on the U.S. budget.
The U.S. faces a critical juncture. Addressing the national debt requires a multi-pronged approach, including spending cuts, economic growth strategies, and potentially, reevaluating defense spending priorities. The nation’s ability to navigate this challenge will not only determine its economic future but also play a crucial role in the global financial landscape.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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