Global Debt Bubble: The 247 Trillion Overhang

Despite a thriving U.S. economy, the Office of Management and Budget is planning on a trillion-dollar deficit, while the government intends to issue $1.338 trillion in Treasury bonds. Interest payments alone could exceed defense spending by 2026. According to the Peter G. Peterson Foundation, by 2048, U.S. government interest payments could become its number one budget expense. In a vision cycle, in order to repay its debts, the government must continue to borrow. At the same time, the demand for entitlement programs keeps growing.

Nassim Taleb is not yet predicting another 2007 financial crisis, but he admits the risks are there. He advises investments in real estate and gold as a hedge against any future financial crash, as well as Treasury bonds instead of riskier investments. Taleb believes it is time to build an aggressively defensive portfolio.

While stocks remain risky, the demand for gold has increased in both India and China, and global central banks have been stocking up their gold reserves. The total amount of gold being held by central banks is at 148.8 tons, up by 22 percent from the first quarter of 2017.

With continued global unrest and spiraling debt looming ominously, gold will remain a popular investment and hedge against inflation.

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