The United States is approaching a milestone that feels like a breaking point. The national debt has passed $39 trillion, and as it approaches the big 40, the math is becoming impossible to ignore.
Billionaire investor Jeffrey Gundlach—often dubbed “The Bond King”—believes the real issue isn’t just how much debt exists, but when the system stops functioning.
In a recent interview with Julia La Roche, Gundlach made it clear that the old playbook is no longer in play.
“We are no longer in a secular declining interest rate environment,” he said, signaling the end of a 40-year tailwind that made debt manageable.
At the same time, the U.S. is running roughly $2 trillion annual deficits, while interest costs have exploded from $300 billion to $1.4 trillion per year. That combination, Gundlach bluntly states, is “untenable.” The implication is that something has to give.
Inflation As a Tool
One path forward is as old as the postwar era—currency debasement. This strategy aims to repay debt in cheaper dollars through inflation.
After World War II, the U.S. used this exact approach, holding interest rates artificially low while inflation ran higher. The result was deeply …Full story available on Benzinga.com
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