U.S. Debt Woes Could Fuel Gold and Bitcoin Rally, Says Expert

Luke Gromen, a macro investor and founder of Forest For The Trees (FFTT), believes gold and Bitcoin are poised to benefit from the worsening fiscal situation in the U.S.

In a recent conversation with David Lin, Gromen emphasized his favorable view of both assets, explaining that they are well-positioned to perform strongly as the U.S. government may resort to inflation to manage its debt.

According to Gromen, for the U.S. to sustain its budget, negative real interest rates—where inflation outpaces nominal rates—are necessary. Historically, this scenario has been favorable for gold, and he believes Bitcoin will also thrive under these conditions.

He explains that when a heavily indebted country, like the U.S., cannot service its debt without negative real rates, it creates an ideal environment for assets like gold and Bitcoin. Gromen pointed out that the disconnect between gold prices and rising real rates in the U.S. is evidence of this, noting that similar patterns are common in emerging markets.

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Gromen suggests that the U.S. is in the early stages of moving away from positive real rates, which bodes well for both gold and Bitcoin in the long term.

Alexander Zdravkov