America is entering uncharted financial waters. For the first time in history, annual interest payments on our federal debt have surpassed $1 trillion. A number that now exceeds the entire defense budget and outpaces the combined cost of Medicaid, food stamps, and disability insurance.

That number isn’t going down anytime soon. It’s growing. Fast.

Washington is locked in a dangerous cycle, borrowing more to pay for what it already owes, then borrowing again to cover the new bill. Billionaires, policy makers and academics all call it the same thing:  unsustainable.

As borrowing costs surge, and confidence in the U.S. government’s ability to repay its debts erodes, the bond market, the bedrock of global finance, is starting to crack. And that puts your wealth at risk.

The Real Problem With Rising Rates

Every time the government runs a deficit, it sells Treasury bonds to fill the gap. But the more it borrows, the more interest it has to offer just to keep attracting buyers. That means even more debt. Then even higher interest rates. And so on.

We’re watching a chain reaction unfold. The kind that doesn’t stop on its own. It’s what investors fear most, a debt death spiral.

We’ve already seen the impact: yields on long-term U.S. bonds hit new highs this May. Investors are asking for more in return, and that’s because they’re worried. Not just about inflation, but about whether the U.S. can keep its financial promises.

Big Names Are Sounding the Alarm

In the words of Ray Dalio, founder of Bridgewater Associates, we have “three years, give or take a year” to avoid a full-blown economic “heart attack.” He warns that America is heading toward a point where our only option is to borrow even more at even higher interest rates just to stay afloat. “The change is unthinkable—and then it happens suddenly,” Dalio recently told The Wall Street Journal. ¹

He’s not alone. Kenneth Rogoff, former IMF economist, points out that most sovereign defaults don’t wait for the numbers to collapse. They happen when confidence disappears. And when it does, the markets turn quickly. ²

Downgrades and Disbelief

The U.S. has already been downgraded by all three major credit rating agencies. Fitch pulled our AAA rating in 2023. Moody’s dropped us to AA1. These are the warning flares before the explosion.

When your credit rating drops, your cost of borrowing goes up. That’s true for households, and it’s true for countries. A lower rating means higher yields. And higher yields mean even bigger interest payments. It’s the definition of a vicious cycle.

Ben Harris from the Brookings Institution pointed out a frightening truth. If the perceived default risk on Treasurys moves even slightly, from 0% to 0.2%, that’s "a massive shift". Because you’re talking about trillions of dollars. Many are moving their money to Europe and Asia, seeking more stable government bonds.³

Power of the Bond Market

Forget political gridlock. The real threat to policy proposals like President Trump’s “One Big Beautiful Bill” might be the bond market itself. As borrowing becomes more expensive, even popular tax cuts or stimulus bills face growing resistance. Not from lawmakers, but from investors.

Just ask the United Kingdom.

The British government proposed tax cuts in 2022. The bond market revolted. Yields soared, the pound collapsed, and the government fell apart. Chancellor Kwasi Kwarteng lost his job. Prime Minister Liz Truss resigned. Citigroup made it clear: unless the U.K. changed course, it would keep punishing them in the markets.⁴

That’s the power of the bond market. And it doesn’t care who’s in office or what party they represent. And if it can happen there, it can happen here.

What This Means for You

Rising federal interest costs aren’t just a D.C. problem. They bleed into every corner of your financial life. When Treasury yields go up, so do the rates on mortgages, car loans, credit cards, and business financing.

The Committee for a Responsible Federal Budget estimates that just holding the 10-year Treasury yield at current levels adds $1.8 trillion in interest payments. If rates rise further, that number explodes.

And JPMorgan CEO Jamie Dimon has warned that a sudden spike in yields could “crack the bond market,” potentially triggering a financial panic.

Some officials suggest we’ll never default because we can just “inflate the debt away.” That might be technically true. But inflating the debt away also means inflating your savings away. It means a weaker dollar, higher prices, and a total erosion of purchasing power.

There’s no way to do that without punishing the average American.

Conclusion

When debt piles up, when interest costs explode, and when trust in the system starts to fade, smart investors look for something with no counterparty risk. They look for something real. Something tangible. That’s why they turn to physical gold.

Gold doesn’t need a credit rating. It doesn’t depend on the next election, or the next central bank announcement. And it doesn’t go bankrupt.

At American Hartford Gold, we help people take control of their financial future. Whether you want to hold physical gold and silver in your hand, or store them in a secure Gold IRA, we’ll walk you through every step. We believe your savings should be protected from the chaos in Washington and the uncertainty in global markets.

If you’re ready to move out of harm’s way, call us at 800-462-0071. We’ll show you how to diversify smartly, securely, and quickly, before the next economic “heart attack.”

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Max Baecker is the President of American Hartford Gold (AHG), the nation’s largest retailer of precious metals. He leads American Hartford Gold’s mission to help clients achieve long-term financial security with physical gold and silver.

Under his guidance, American Hartford Gold has delivered billions of dollars’ worth of precious metals to thousands of satisfied clients.

Max's dedication to upholding American Hartford Gold's industry-leading standards is reflected in its accolades. American Hartford Gold has made numerous high-ranking appearances on the prestigious Inc. 5000 List of America’s Fastest-Growing Private Companies. AHG holds an A+ Rating from the BBB and a 5-Star Rating on Trustpilot from thousands of American Hartford Gold reviews. American Hartford Gold is the only precious metals company trusted and recommended by Bill O’Reilly.

AHG offers investment-grade gold and silver coins and bars at competitive prices. Clients also benefit from its buy-back commitment with no back-end fees. To learn more, visit American Hartford Gold.

Notes:

1. https://finance.yahoo.com/news/ray-dalio-debt-crisis-could-cause-economic-heart-attack-for-us-economy-in-the-next-3-years-165939619.html

2. https://scholar.harvard.edu/files/rogoff/files/from_financial_crash.pdf

3. https://www.brookings.edu/articles/assessing-the-risks-and-costs-of-the-rising-us-federal-debt/

4. https://en.wikipedia.org/wiki/September_2022_United_Kingdom_mini-budget