Why Gold Could Be the Smart Play Amidst US Debt Surge

With the US government preparing to unleash over $1 trillion in new debt, bonds might take a back seat to commodities as a safer bet, according to Larry McDonald, founder of "The Bear Traps Report."

He projects roughly $1.5 trillion in fresh government debt issuance between this September and next February, a significant jump from last year.

This massive influx of bonds, coupled with persistent federal deficits, could heavily pressure an already volatile bond market. McDonald anticipates a huge shift: $4 to $6 trillion moving from “paper” financial assets (stocks, bonds) into “hard assets.”

READ MORE:

Altcoin Season Might Already Be Starting – But Most Traders Don’t See It

What are these hard assets? Think precious metals like gold, silver, and platinum, which have already performed well this year. Agricultural commodities are also on his radar. McDonald suggests a radical shift from the traditional 60/40 portfolio (stocks/bonds) to a “30/30/30/10” split, with a much larger chunk (30%) in commodities and 10% in cash.

For everyday investors, gaining direct exposure to commodities can be tricky. However, ETFs like the Invesco DB Agriculture Fund (DBA) and SPDR Gold Shares (GLD) offer accessible ways to invest. While McDonald isn’t predicting an immediate bond market crash, the sheer volume of anticipated debt makes a strong case for fortifying portfolios with tangible assets.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.