We Have A Debt Problem And It’s Not Going Away

We have a debt crisis, no credit rating agencies have the USA ranked with a top rating as of 05/20/2025. Every administration spends more than the last. The current administration is not going to fix the debt/spending crisis. To fix the problem you would have to cut entitlements and the president has already come out and said he is not going to do that. Whoever does decide to cut entitlements/spending will be extremely unpopular, their party might not get elected again for many years. I don’t see either party having the stomach or the will do not what is necessary to fix the problem. They seem to be just kicking the can down the road till they can’t. When they can’t that is when I believe the intense pain will begin.

We saw the current administration blink when they saw that there was a large sell off of US debt when it came to the tariffs. The USA cannot afford to not have buyers of its debt, that would end the party and would severely limit what they are able to do. If we have this debt hanging over our heads and we believe it will only get worse, what do we do going forward when it comes to investing? Let me give a couple of ideas.

1) We have to hedge these portfolios. Maybe even hedge portfolios for clients that you would traditionally put 100% in equities.

• Gold/Silver

• Options

• Diversified High Credit Rated Investment Grade Bond Portfolios

• I hate BTC but yeah throw in BTC.

2) Invest in foreign market and defensive type of stocks.

3) Reduce exposure where you can. I am not saying don’t buy US debt but keep it diversified. Go with shorter duration bonds.

4) Keep larger piles of cash in different currencies.

5) Diversify geographically.