Image Source: Pixabay

The last 100 years USA debt to GDP has exploded on the back of wars and crisis.

The first chart shows how and when this came to be.

Chart 1 - US Debt to GDP%.

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The US Debt to GDP% ratio can be fixed in a few ways:

1) Revalue selective assets on the USA balance sheet higher: 8,000 tonnes of gold is currently valued at $34 USD an once. This could be revalued to $10,000 USD and once. 

2) Massive production miracle to boost GDP from some new technology.

3) Cut spending and pay back the debt. Very hard politically and a worldwide depression may result.

4) Inflate prices higher while debt stays the same (just like Israel did after several wars). Most likely!

Chart 2 - How Israel fixed its debt problem. Israel inflated the debt away.

Short Answer: Higher inflation and suppressed interest rates are coming to the USA very soon, to simply deflate the debt away. 

Currently, USA debt to GDP% is around 122%. This can still go to +150% before Congress deals with the debt. There may be an election issue in 2028, as the interest expense costs become too much to bear.

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