The Critical Details

The United States Government is within an eyelash of $40 trillion in debt.  It will reach that benchmark in just weeks.  It is not that a round number like $40 trillion is more important the $39- or $41 trillion.  But it is psychologically important.  It will rivet the world’s attention.

In this commentary we want to paint some details on that $40 trillion in debt. It’s not a pretty picture, but here we go. 

Washington has added $1 trillion in about 5 months.  At that rate the national debt is growing by $2.4 trillion a year, or $76,000 each second.

During President Biden’s four years, the national debt grew by an average of $5.8 billion per day.  Thus far in this term, from January. 20, 2025 to August 17, 2026, the debt under President Trump has grown by $6.5 billion per day.

Another way to underscore the extraordinary rate at which Washington has been accumulating debt is this: it crossed $38 trillion in October 2025 and $39 trillion on March 17, 2026.

The national debt is expected to skyrocket to $50 trillion in 2029, in just three years.

Note that while the Social Security Trustees say the trust will be exhausted by 2032, one leading bond expert, Jeffrey Gundlach says the trustees are too optimistic and that it will be broke by 2029.

So let us look at the borrowing picture.  It is central to understanding why you must own gold to protect yourself from the dollar’s fate.  Since 2000 the cost of servicing  America’s debt has tripled.

The interest rates that Washington, the world’s biggest debtor, must pay to fund all that borrowing, are rising fast.  The 30-year US Treasury was issued days ago at a yield of 5.126 percent, marking a 25-year high.  On Tuesday (8/18) 30-year Treasury yield market rate topped 5.33%, the highest in 19 years.

Meanwhile, the Treasury is very concerned about the 10-year yield climbing to 5 percent.  It is very close, already approaching 4.75 percent.

One of the most dangerous developing factors is that foreign creditors are backing away from Washington’s debt.  In June leading creditor Japan was down 2.3 percent from May, the UK was down one percent, and China was off 4 percent.  When foreign creditors back away, the gap must be filled by someone else.  

Michael Hartnett, the widely followed Chief Investment Strategist at Bank of America, has issued a new report on this dangerous confluence of rising interest rates and the $40 trillion debt benchmark entitled, “”Strife Begins at Forty.”

In short, Hartnett says that Hartnett believes that gold is the optimal solution at this crossroad.  

Under the circumstances of sharply rising rates we reissue our warning about stocks that often struggle when rates are high.  Hartnett notes the same anomaly, saying “”US stocks hit a historic high on the same day that US Treasuries were issued at the highest yield in 25 years—this is reality.” 

It is a very strange and precarious reality, indeed.

Hartnett concludes that gold is the best means of hedging against the depreciation of  the U.S. dollar, the collapse of bonds, and asset inflation. It is, he says, the optimal solution.