🔥🔥🔥 Analyst Predicts: US to Face Its Own ‘Bank of England’ Debt Crisis Prior to Elections
Analyst Warns of a Potential Crisis for U.S. Debt with Steep Yield Increases
Otavio Costa, Macro Strategist at Crescat Capital, has issued a warning about looming issues for the U.S. economy ahead of the upcoming presidential elections. On social media, Costa highlighted the deteriorating liquidity of the U.S. government securities index, noting that it is at its lowest levels since the 2011 European debt crisis.
Costa emphasized the concerning nature of this situation, particularly given the significant interest rate differentials between the U.S. and other developed economies. He suggested that the U.S. might be heading towards its own "Bank of England" moment. This term references the sharp increase in treasury yields experienced by the UK in September 2022, following announcements of over $57 billion in unfunded tax cuts, which raised concerns about the UK's debt sustainability.
Costa also pointed out that the traditional 60/40 investment portfolios, which allocate 60% of funds to equities and 40% to bonds, might begin to shift some of their allocation towards assets like gold. This shift aims to build defensive structures against upcoming imbalances, leveraging the stability of safe-haven commodities.
The warnings about an impending debt crisis are not new. Earlier this year, other analysts and experts have voiced similar concerns. In January, #robertkiyosaki cautioned about the ballooning U.S. debt, advising investors to buy gold, silver, and bitcoin. In March, Mike Novogratz, CEO of Galaxy Digital, suggested that the government should raise taxes and cut spending to avert a debt spiral crisis.
These insights underline the growing apprehension about the U.S. economic outlook and the potential need for significant fiscal adjustments to ensure stability.
Source - news.bitcoin.com