What are the potential future scenarios of the US sovereign debt and US fiscal debt situation?

[kiwing100]

 

Read Dalio's book on How Countries Go Broke.

 

Buffett - "fiscal policy is what scares me in the United States" 

 

https://youtu.be/j1vGFpd49wM?t=5577

 

What are the potential future scenarios of the US sovereign debt and US fiscal debt situation?

 

What are the solutions to reduce the impact of these potential future scenarios on investment portfolios?
 

[UK]

2 hours ago, kiwing100 said:

 

Read Dalio's book on How Countries Go Broke.

 

Buffett - "fiscal policy is what scares me in the United States" 

 

https://youtu.be/j1vGFpd49wM?t=5577

 

What are the potential future scenarios of the US sovereign debt and US fiscal debt situation?

 

What are the solutions to reduce the impact of these potential future scenarios on investment portfolios?
 

 

Inflation? So just dont hold too much of monetary assets for long term?

[rogermunibond]

Fiscal dominance and financial repression.

[DegenerateGambler]

Just more money printing to dilute the debt, but that is actually good for the USA and bad for the average USA citizen who has to face inflation.  Since the reserve currency status isn't going away any time soon, USA assets (stocks, houses etc) should go up in price (faster than debt) and the net worth of the nation will actually increase.  The USA has a net worth well over 150 trillion dollars and 38 trillion dollars of debt is nothing compared to the assets the USA holds.  Just keep printing - make assets go up, and USA net worth keep going up while the middle and lower classes becomes relatively worse off standard-of-living wise.  The nation itself will be fine while average citizen might be a bit worse off, and of course live like 7-8 years shorter than Europe and Japan on average since healthcare and healthy living is a mess here.  I don't think the USA is made for the average citizen, it's really just made for the ultra-talented and rich classes.   So their aggregate assets will still make the nation super rich on a net-worth basis even as we print to oblivion.

[Paarslaars]

Exactly, and this is why China is massively buying gold and dumping US debt...

[Xerxes]

On 11/25/2025 at 3:44 AM, UK said:

 

Inflation? So just dont hold too much of monetary assets for long term?

??? if you mean cash and bonds, yes  
 

But monetary assets also means ownership of businesses (aka stocks) 

[brobro777]

The US will be able to borrow and spend way more than anyone expects, even ourselves

 

We gonna be lak, damn we can get away with this much more for this long? Haha yes LFG!!!

 

haha

 

[Paarslaars]

Jup the great debasement going strong.

[John Hjorth]

38 minutes ago, brobro777 said:

The US will be able to borrow and spend way more than anyone expects, even ourselves

 

We gonna be lak, damn we can get away with this much more for this long? Haha yes LFG!!!

 

haha

 

Now that kind of funny, @brobro777 lol!,

 

But I not sure all here on CofB&F would agree on that, i.e. Charlie [ @dealraker ]. ...

[UK]

1 hour ago, Xerxes said:

??? if you mean cash and bonds, yes  
 

But monetary assets also means ownership of businesses (aka stocks) 

 

Yes, this was what I meant, sorry, lost in translation:)

[brobro777]

1 hour ago, John Hjorth said:

 

Now that kind of funny, @brobro777 lol!,

 

But I not sure all here on CofB&F would agree on that, i.e. Charlie [ @dealraker ]. ...

 

 

Well it's inevitable just like the homeless in LA defecating into the concrete planters on the sidewalks on Wilshire Blvd

 

You just gotta accept it for what it is

 

 

[dealraker]

2 hours ago, John Hjorth said:

 

Now that kind of funny, @brobro777 lol!,

 

But I not sure all here on CofB&F would agree on that, i.e. Charlie [ @dealraker ]. ...

He'll avoid dealing with it if allowed, as all others have.  But push come to shove...just don't own any US long term high yielding debt unless you can handle restructuring (lowering the interest payment).  Remember the one thing related to business that defines the man in charge is respect, or lack thereof, of debt and debt holders.

[tede02]

I've been thinking about this A LOT. The question about what to own, and not to own, seems more clear than the timing of when a reckoning will occur. Something that is staring us down in the US is the insolvency of Social Security which is going to hit in 2032/2033. If we face a recession before then, could move the date up. I see the coming entitlement crisis, which isn't far away, as one potential trigger for the markets to start checking fiscal policy. What that looks like most likley is rising long-term interest rates which we seem to be getting some early signs of now. 

 

Reading Dalio's books and just observing what is going on in the UK and France right now (related to their fiscal problems and their inability to address them politically), I've come to accept that nothing is going to be done voluntarily in the US to the right financial ship. It's going to take some kind of shock or crisis to force policy makers to make the hard choices that no one otherwise will. And one principal of Dalio's that I completely agree with is when the crisis comes, the central bank will print money/debase because the alternative is too much pain for the public to take (the alternative basically being austerity which would likely include debt defaults and restructuring). The main thing I'm avoiding now is long dated bonds and have been getting more interested in short duration TIPS ETFs for my reserves that I don't want exposed to the equity markets. Also interested in gold and bitcoin.