The US government's debt has reached a record high of almost $33 trillion, causing concerns about its impact on the nation's finances and the risk of a debt crisis, according to experts like Larry McDonald, Ray Dalio, and Nouriel Roubini.
The economy is experiencing a soft landing, but the long-term consequences of easy money policies are still uncertain, with bankruptcies and a potential shakeout in office real estate looming.
Despite the appearance of a "Goldilocks" economy, with falling inflation and strong economic growth, rising yields on American government bonds are posing a threat to financial stability, particularly in the commercial property market, where owners may face financial distress due to a combination of rising interest rates and remote work practices. This situation could also impact other sectors and lenders exposed to commercial real estate.
China's property sector remains in crisis as 34 out of the top 50 developers have defaulted on debt, with $1.5 billion of combined bond payments due in September.
Many Americans have a significant amount of home equity that can be tapped into, with homeowners sitting on nearly $30 trillion in equity, but borrowers should carefully consider the terms, rates, and risks associated with borrowing against their homes.
The U.S. debt is expected to reach $2 trillion this year, doubling from the previous year, due to a decline in global economic growth.
The crashing office real estate market in America's largest cities is putting them at risk of an economic "doom loop" with potential consequences including higher tax rates, property value declines, and financial trouble for banks.
The US is facing a potential financial crisis as the national debt reaches $33 trillion and the federal deficit is expected to double, posing a threat to President Biden's government and potential consequences for American citizens.
US companies have experienced a 176% increase in debt defaults in the first eight months of 2023 compared to the same period in 2022, with high interest rates pushing businesses into financial distress, particularly in the media and entertainment sector.
The US's $32 trillion debt may not be as dire as it seems, as experts point out misconceptions about the national deficit and its impact on the economy. However, future debt problems could arise due to current spending rates.
The US national debt has exceeded $33 trillion for the first time, reaching $1.58 trillion since the lifting of the debt ceiling in June, as lawmakers work to avoid a government shutdown and seek ways to fund the government beyond September 30.
Wall Street feels defensive as the US national debt surpasses $33 trillion and a government shutdown looms, potentially worsening the economy's current issues and increasing the likelihood of a recession, with the shutdown estimated to cost the US economy $6 billion per week and shave GDP growth by 0.1 percentage points in the fourth quarter of 2023.
