While speaking at recent Trump’s campaign rally Tesla CEO Elon Musk issued a warning and declared “Financial emergency” in the US. He said that government interest payment reaches over $1 trillion annually, which is exceeding the entire allocated annually US defence budget.
During the recent Trump’s campaign rally Musk said that these interest payments are 23% of all federal tax revenue, with which the national debt. reaches to $35.7 trillion, as Times of India reported. Bank of America’s analysts predict that debt. could hit $37 trillions at the end of this year. They said debt. increasing at an alarming rate of approximately $1 trillion in every 100 days.
The main reason for the rapid increase in the debt. are the counter measures taken at COVID era. This is the major key point to increase inflation due to which US federal reserve implants historic hikes at interest rates. Current prediction indicates that deficits will continue to rise. Analysts estimate that annual deficits increase between $500 billion to $600 billion under the various policies scenarios.
Due to this increasing debt. crisis has led to a turn around of people towards alternative assets, pushing both Bitcoin and gold to record levels. Bitcoin has reached at its all time high of $70,000, as many investors consider it as “Digital gold” amidst growing inflation.
Bitcoin is the “fastest horse to beat inflation” said by renowned investor Paul Jones. He reiterated his warning about an increasing “debt. bomb” by defining it as “fiscal recklessness”.
Some of the analysts declared the above situation as a “Nightmare scenario” for the federal reserve, which is facing a challenging task of controlling inflation. Tesla has a significant exposure to the crypto market, holding approximately 10,000 Bitcoins of valued around $800 million. The company recently transferred its Bitcoin holding to new wallets, promoting speculations about potential sales.