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MTrading Team • 2024-02-28

The FED Borrows from Future Generation with the National Debt above $34 Trillion

The FED Borrows from Future Generation with the National Debt above $34 Trillion

Concerns about an impending economic disaster are being expressed by numerous well-known investors and financial leaders as the U.S. national debt has risen past $34 trillion. Some experts also shared their opinion on the unsustainable nature of US debt. However, a significant portion of the issue stems from the US central bank.

Market participants criticized lawmakers for their unsustainable economic practices, which effectively “borrowed” from future generations. Over time, the United States' fiscal trajectory is unsustainable. And that only indicates that the debt is expanding more quickly than the economy. In a sense, the USA borrows from the next generation instead of giving financial sustainability first priority.

At this point, it is crucial to clearly realize the crucial role the Federal Reserve plays in all of this. On the one hand, they have a part in everything. On the other hand, the FED is not resigning from its position.

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Furthermore, the Fed is given new authority and responsibilities virtually annually. Experts believe the Federal Reserve is already a way too strong organization that is not really accountable to anybody. That contributes to the issue. Besides, the organization that was meant to be apolitical has turned extremely political, and that might have major repercussions.

The FED Accelerates De-Dollarization

The rapidly increasing national debt in the United States is causing anxiety for many experts, who believe that the country's economy is on the verge of a financial crisis as a result of the debt.

Additionally, analysts issued a warning: although the US economy seems booming, there is a "debt bomb" lurking beneath the surface. The USA has a fiscal deficit of between 6% and 7%.

Market worries over debt might negatively impact the dollar's status as the world's reserve currency. What we see now is the acceleration of a no-denying trend toward dollarization. The fact that major oil-producing nations, such as Saudi Arabia, now take payments for oil in currencies other than US dollars, was something to take note of. It may shape the market drastically in the next few years.

May the trading luck be with you!