Reuters: Worsening U.S. debt outlook has more to do with gold and Bitcoin than bonds

PANews April 19 news, according to Reuters, market observers said that although the U.S. Treasury market has so far remained relatively optimistic about the country’s fiscal path, the recent surge in gold and Bitcoin prices is partly due to the rapid decline in U.S. government debt. Rising concerns. According to the Congressional Budget Office, the U.S. budget deficit expanded to $1.7 trillion in fiscal year 2023 and is expected to reach $2.6 trillion by 2034. Meanwhile, U.S. government debt held by the public as a share of gross domestic product is expected to rise to a record 106% in 2028 from 97% in fiscal 2023. It surged to $27 trillion from $17 trillion at the beginning of 2020 and $5 trillion in 2007.

The uncontrolled growth of U.S. government debt is causing growing concern as interest rate payments also take up a larger share of the government budget — even surpassing defense spending in some months. This worsening trajectory has boosted demand for Bitcoin and gold, currencies that are often used as a hedge against inflation and a loss in the dollar’s purchasing power. Brad Bechtel, global head of foreign exchange at Jefferies, said: "Concerns about the U.S. debt cycle, currency devaluation, especially fiat currencies, are really driving this narrative." Bechtel said this is partly driving investors' interest in the likes of (Bitcoin) There is more allocation to something, and for gold that proportion is even greater, with concerns about fiat currency devaluation often being one of the driving factors for gold enthusiasts. Lawrence H. White, professor of economics at George Mason University, said: “Because of this, people are interested in both gold and Bitcoin because inflation has been unstable over the past few years.