Elon Musk voiced the hackneyed albeit grim prediction that the US dollar is on the verge of a collapse. The Tesla and SpaceX CEO is certain that the greenback is doomed to failure unless the issue of the soaring US federal debt is addressed promptly.
"We need to do something about our national debt or the dollar will be worth nothing," the high-tech mogul posted on the X social platform.
Wall Street analysts and economists are on the same page with Elon Musk. They urge Biden’s administration to slow down the alarming pace of borrowing. Meanwhile, the state debt is expected to swell by another $1 trillion every 100 days. As of today, the national debt in the US has ballooned by a whopping $34 trillion. Economist Les Rubin reckons that the snowballing public debt is to blame for stubborn inflation and a lingering cost-of-living crisis. Moreover, the analyst warns that ongoing inflation rates in the US will complicate the payment of interest in the future.
In 2023, the US federal debt equaled 122.1% of GDP. The International Monetary Fund forecasts that the debt will zoom up to 133.9% by 2029. The situation is getting from bad to worse as major central banks pump up gold purchases. Investors are shifting focus away from the greenback and dollar-denominated assets. In turn, this is bullish for the precious metal.