The research platform Game of Trade has raised concerns about the United States economy, specifically pointing to the performance of U.S. government debt markets. In a recent post on X (formerly Twitter), the platform suggested that the economy is facing a grim outlook due to the collapse of the government debt market.
According to the analysis, U.S. government bonds have broken a 40-year uptrend, with prices dropping to levels not seen since 2013. This decline has resulted in significant losses for investors, particularly those heavily invested in Treasury bonds. In contrast, gold has outperformed Treasury bonds, surging by 170% since March 2020.
The surge in gold prices is attributed to growing government spending, which has increased from $3.4 trillion to nearly $4 trillion in just two years. The platform highlighted that rising government spending, financed by increased issuance of Treasury bonds, is a significant factor contributing to potential market turmoil.
Furthermore, the researchers pointed to a decline in the labor force participation rate as a driving factor behind the breakdown in Treasury bonds. The correlation between rising U.S. government debt and decreasing labor force participation over the past two decades signals economic strain as more individuals retire and fewer participate in the workforce.
The aging U.S. population and the impending retirement of baby boomers further compound economic challenges, necessitating increased government spending. However, doubts remain about meaningful changes to spending habits in the near future, exacerbating concerns about mounting government debt.
In light of these developments, attention is now on assets that could protect investors against an economic crash. Gold has been identified as a safe haven, with its recent rise potentially indicating further upside potential. It is important to note that the content in this article should not be considered investment advice, as investing is speculative and carries risks.