{"id":2068594,"date":"2023-10-16T09:43:04","date_gmt":"2023-10-16T13:43:04","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/geopolitical-risks-may-accelerate-a-debt-crisis\/"},"modified":"2023-10-16T09:46:34","modified_gmt":"2023-10-16T13:46:34","slug":"geopolitical-risks-may-accelerate-a-debt-crisis","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/geopolitical-risks-may-accelerate-a-debt-crisis\/","title":{"rendered":"Geopolitical risks could hasten a debt crisis."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">14<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fgeopolitical-risks-may-accelerate-a-debt-crisis%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2068594&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><blockquote>\n<h2>Commentary<\/h2>\n<p>Many\u200d investors are sounding the alarm about a looming debt crisis, but governments \u2063seem\u2064 to be turning a blind eye to the warning signs.<\/p>\n<p>In times of\u2063 inflationary\u200c crisis, it is crucial for the government to\u2064 cut back on spending to curb rising prices and prepare for higher borrowing costs. However, the Biden administration is disregarding all the signals and continuing to \u200bborrow at an unprecedented\u2062 pace.<\/p>\n<div class=\"shortcode\">\n<div class=\"border-comp-divider mb-4 mr-4 w-full max-w-[500px] border px-5 py-4 text-[16px] leading-[20px] text-[#262626] md:float-left\" id=\"in_article_related_stories\">\n<h2 class=\"mb-3 font-sans text-[16px] font-semibold uppercase leading-[19px] text-[#2F2F2F]\">Related Stories<\/h2>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-2\">\n            <a href=\"http:\/\/www.theepochtimes.com\/article\/opinion-geopolitical-risks-are-net-bullish-for-us-assets-5508545?ea_src=author_manual&#038;ea_med=related_stories\"><\/p>\n<h3>Geopolitical Risks Are Net\u2064 Bullish for US Assets<\/h3>\n<p>            <\/a>\n          <\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">10\/12\/2023<\/div>\n<\/p><\/div>\n<div class=\"shrink-0 basis-[120px]\">\n          <a href=\"http:\/\/www.theepochtimes.com\/article\/opinion-geopolitical-risks-are-net-bullish-for-us-assets-5508545?ea_src=author_manual&#038;ea_med=related_stories\"><\/a>\n        <\/div>\n<\/p><\/div>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-2\">\n            <a href=\"http:\/\/www.theepochtimes.com\/epochtv\/global-technological-standards-and-geopolitics-a-hudson-institute-event-5327396?ea_src=author_manual&#038;ea_med=related_stories\"><\/p>\n<h3>Global Technological Standards and Geopolitics:\u200d A \u2064Hudson Institute Event<\/h3>\n<p>            <\/a>\n          <\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">6\/12\/2023<\/div>\n<\/p><\/div>\n<div class=\"shrink-0 basis-[120px]\">\n          <a href=\"http:\/\/www.theepochtimes.com\/epochtv\/global-technological-standards-and-geopolitics-a-hudson-institute-event-5327396?ea_src=author_manual&#038;ea_med=related_stories\"><\/a>\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>Debt crises occur when even the most conservative investors refuse to\u200b add to a portfolio of government bonds that are already losing value. Central banks may step in to buy these unwanted bonds, but this \u2064only exacerbates \u2063the inflation problem and leads to losses for the central bank.<\/p>\n<p>The monetary and fiscal recklessness of 2020 has created \u2064an enormous problem that is difficult to solve. Central banks \u2063are already reporting losses on their assets, and taxpayers will \u2062ultimately have to cover these negative\u2064 results.<\/p>\n<p>Government \u2063bonds\u200c have\u200c been a disastrous investment in 2022 and continue to yield\u2064 negative \u200breturns in 2023.\u200c Meanwhile, sovereign debt is skyrocketing at an alarming rate, disregarding the impending\u2064 wave of bond maturities in the global fixed-income\u2062 market in 2024 and 2025.<\/p>\n<p>The U.S. national debt has\u200b surged by $550 billion in \u200bless than a \u2063month, reaching $33.5 trillion in just four months. This surge coincides with\u200b a\u200d rise in the 10-year Treasury yield from 3.7 \u2064percent to 4.6 percent. It is concerning to see a government rapidly \u2064increasing \u2063its \u2064debt while facing a $500 billion maturity wall in 2025 and \u200b$7.6 trillion\u2064 in \u2063public debt maturities within the next year, as reported by Goldman Sachs.\u200d Additionally, data \u200bfrom the Commodity Futures Trading Commission reveals that U.S. Treasury net long positions in two-year and 10-year\u2063 notes are at their lowest level since\u200c October 2018, adding to the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/geopolitical-risks-may-accelerate-a-debt-crisis\/\" title=\"Geopolitical risks could hasten a debt crisis.\">dangerous scenario\u200b amidst escalating geopolitical tensions<\/a>.<\/p>\n<p>The U.S.\u200d government is \u2062banking on growing\u200d global demand for U.S. dollars to offset its fiscal imbalances, as well as \u200crelying on\u200d the Federal Reserve\u2062 to adjust its monetary policy if \u2064necessary. However, this is a\u200d risky bet \u2062considering that China, \u2064Saudi Arabia, \u2064and other nations are reducing \u200ctheir holdings \u200dof U.S. Treasuries\u2063 to multiyear lows. It is\u200d imprudent to assume that the world will absorb \u2062the\u200c United States&#8217; fiscal \u200cimbalances \u200dat any \u200bcost during\u2063 a global geopolitical conflict. Furthermore, \u2063it is reckless\u2063 to \u2063believe that the\u2064 Federal Reserve will be able to purchase all the \u2063necessary Treasury \u2064bonds when it\u2063 is already operating at \u200ca loss. Such irresponsibility could potentially\u2064 jeopardize the \u2064<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/nascar-teams-call-revenue-model-broken\/\" title=\"NASCAR Teams Call Revenue Model \"Broken\"\">long-term stability<\/a> of the U.S.\u2062 dollar.<\/p>\n<p>The fiscal imbalances \u2063of \u2062the \u2063United\u200d States are not unique; many \u2064other developed nations are \u200balso grappling with high deficit \u200clevels and \u2063facing \u200crising rates, central bank losses, and impending maturity walls, particularly \u2062in the eurozone.<\/p>\n<p>All of\u200b this points to a process of monetary debasement that began \u200din 2009 but accelerated in 2020. Governments are devaluing \u2063their currencies to mask their massive debts \u200band deficits, eroding the \u2064savings \u200band wages of their citizens. In such an environment, \u2064sovereign bonds offer \u200clittle\u2063 protection for investors.<\/p>\n<p>Governments are unwilling to bear the consequences of the risks \u200dthey take\u2064 and instead pass on the burden to others \u2063through \u200cnegative real rates or \u2062losses in bond prices. The inflationary spiral is \u200clikely\u2064 to persist, and the possibility of another round\u200c of quantitative easing will not\u200c be enough to offset the accumulated losses in \u200cbond portfolios or alter the scenario of currency debasement.<\/p>\n<p>In times like these,\u200c gold emerges\u2062 as an incredibly attractive asset. It is relatively inexpensive\u2062 compared \u200dto its historical purchasing power and monetary \u2062qualities, especially when compared to fiat currencies\u200b that \u200care being devalued through excessive \u2063printing. Given the\u2063 current debt problem and \u200dgeopolitical risks, gold is \u2063a safe\u200c bet in\u200c a volatile world.<\/p>\n<div class=\"my-5\"><em>Views expressed in this article \u200bare opinions of the author\u200b and do not \u2063necessarily reflect the views of The\u200b Epoch Times.<\/em><\/div>\n<\/blockquote>\n<p> <\/p>\n<h2> How does the Biden administration&#8217;s focus \u200don aggressive fiscal stimulus and \u2062social spending\u200b programs impact the long-term sustainability of\u200b the national \u200cdebt?<\/h2>\n<p><span>  Dollars and diversifying their \u200creserves. If global demand for U.S. dollars declines, the government&#8217;s plan could \u2064backfire, leading to a sharp depreciation of the currency and further exacerbating the debt crisis.<\/p>\n<p>Furthermore, the Biden administration&#8217;s focus on aggressive fiscal stimulus and social spending\u200b programs raises concerns about the long-term sustainability of the national debt. While these measures \u200cmay provide short-term\u2064 economic relief, they come at the cost of increasing the burden\u2064 on future generations.<\/p>\n<p>It is crucial for governments to prioritize fiscal responsibility and implement prudent fiscal policies to address the looming debt crisis. This \u2063includes reducing unnecessary government spending, implementing measures \u200cto <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/dhs-chief-mayorkas-strips-border-protections-from-u-s-graduates\/\" title=\"DHS Chief Mayorkas Strips Border Protections from U.S. Graduates\">boost economic growth<\/a> and revenue generation, and actively managing debt levels.<\/p>\n<p>In addition to government actions, it is \u200balso essential for\u200c investors to take a \u200ccautious approach and assess the risks associated with government bonds. Diversifying investment portfolios\u2063 and considering alternative assets can help mitigate the impact \u2064of a potential \u200ddebt crisis.<\/p>\n<p>As \u200cthe warning signs of a debt crisis become more evident, it is crucial for governments to take immediate action to avert a financial catastrophe. Ignoring these warning signs and continuing on a path of excessive \u200cborrowing will\u2064 only\u2063 lead to dire consequences for the economy and future\u2062 generations.<\/p>\n<p>In conclusion, the \u200dlooming debt crisis should not be taken lightly. Governments must acknowledge the \u2062warning signs and take proactive measures to address the growing debt levels. Likewise, investors should exercise caution and diversify their portfolios to\u2063 mitigate the potential risks.\u200d Only \u2064through responsible fiscal\u2063 management and prudent investment strategies can we hope to navigate through the challenges posed by the impending debt crisis.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>to increase government spending without any concern for the potential consequences. This reckless behavior is setting the stage for a future debt crisis that could have severe implications for the economy and the financial well-being of the country. It is crucial for governments to heed the warnings and take appropriate measures to prevent a disastrous outcome.<\/p>\n","protected":false},"author":2354,"featured_media":2068595,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2068594","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2068594","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/2354"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2068594"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2068594\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2068595"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2068594"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2068594"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2068594"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}