• Mike Novogratz, a crypto investor and CEO of Galaxy Digital, is advising investors to buy Bitcoin as the US government’s interest rate on its debt continues to rise.
• The US is now paying $970 billion in annual interest payments – up $41 billion from Q2 – which accounts for over 20% of its total federal tax revenue.
• As the US government struggles to keep up with these payments, some analysts believe the Federal Reserve will be forced to lower its benchmark interest rate again.
Growing Interest Payments
The United States government is now paying $970 billion per year in interest payments – up $41 billion from Q2. This accounts for more than 20% of the government’s total federal tax revenue according to the US Debt Clock. Market analyst Joe Consorti believes that soon these payments could reach an all-time high of one trillion dollars per year.
Federal Reserve Tightening Cycle
Interest costs have been increasing ever since the Federal Reserve began it’s monetary tightening cycle. During this time, they raised their benchmark rate from 0.25% to 5.25%. As tax receipts lag behind sovereign debt growth, more and more money must come from issuance of additional debt – something which will only add further pressure on the Federal Reserve to lower rates once again.
Novogratz’s Advice
In response to this situation, crypto investor and Galaxy Digital CEO Mike Novogratz has advised followers on Wednesday “to Buy BTC” as a potential solution for investors looking to make gains during uncertain times such as these. He believes that investing in Bitcoin may be a way for people who are concerned about inflation caused by rising debt levels and quantitative easing measures taken by central banks around the world.
Implication For The Economy
The implications of unchecked debt growth could be far reaching: if the Federal government can no longer afford its own debts then it may not have enough money left over to fund other important social programs such as healthcare or education initiatives – something which would have severe consequences for millions of citizens across America and beyond. Furthermore, if the Fed continues lowering rates then this could cause further instability when markets become increasingly volatile during economic downturns or recessions due too much liquidity being injected into already fragile economies.
Conclusion
Ultimately, this situation highlights just how precarious our current economic system is: if governments continue racking up huge amounts of sovereign debt then there will come a time when they can no longer pay their own bills – leading them down an even darker path than what we’re currently witnessing today with regards to our national debts and deficits