America’s Unthinkable Debt: Implications for Australians & the Global Economy

By now most of us have heard about the astronomical scale of the US national debt. As of today, America's debt stands at a staggering $37 trillion. This figure continues to grow in real time and is larger than many people realise. This is not just an abstract number you hear on the news; it represents a significant financial challenge with implications for the global economy. For those of us in Australia, and beyond, the ripples of America’s financial pressures could still ripple outward in meaningful ways.

Debt That Reaches the Moon & Beyond

To get a sense of the scale of this debt: If you took that $37 trillion in US dollars and stacked them up, it’d stretch to the moon ten times over. If every Australian citizen were carrying a personal share of that debt, each person’s portion is well over $108,000, and for taxpayers, that number balloons closer to $300,000. Beyond that, when you include the unfunded liabilities for Social Security and Medicare – which are estimated to be between $120 trillion and $160 trillion - the total burden on each taxpayer approaches a mind-boggling $1 million. For Australians these numbers aren't just American concerns; they matter globally, with potential flow-on effects for currency systems, trade, and even the value of the Australian dollar.

The Debt Burden

Looking back at history helps put today’s situation in perspective. In 1835, when the US briefly managed to pay off its debt - the only time in its history it has done so - each American’s share amounted to less than a penny. A worker back then could cover their portion in just a few minutes of labour. Fast-forward to today, the average American’s share would take nearly 3,500 hours, or close to two years of work, to repay. For taxpayers, the situation is even worse, with the burden continuing to grow faster than wages can keep up. While Australians aren’t directly responsible for US debt, we’re not immune either. The dollars we trade, the global bonds we buy, and the commodities we export are all influenced by the health of the US financial system.

The Government’s “Solution”: Inflate or Bust

History has shown that when governments can’t repay their debts, they often turn to inflation. The US government is unlikely to ever pay back $37 trillion - it simply doesn’t have the means. The only solution left is to print more money. This process inflates the real value of the debt and erodes the purchasing power of the dollar. In turn, inflation can drive investors toward what many see as “true money”- precious metals. The Aussie dollar could also face similar pressures, reinforcing the role of gold and silver as essential stores of value.

Protect Yourself

What happens when the system finally buckles under the weight of this massive debt? As Mike Maloney of Goldsilver.com states, most investors may not pay serious attention until gold hits $5,000 or even $10,000 per ounce. By that stage, much of the shift in wealth could already be underway. Early movers will have already positioned themselves in gold, silver, and other hard assets. The choice for Australian investors is clear: protect your wealth now by securing gold and silver, or wait until panic sets in later when prices may be significantly higher.

The Global Ripple Effect

The truth is that the US is the world’s economic engine. And when its wheels start to wobble, the impact is felt everywhere. Australians might be far from Wall Street, but we aren’t insulated from the effects of an imploding dollar, rising inflation, and a global shift towards tangible assets. The warning signs are clear, and they suggest that gold and silver remain valuable tools for preserving wealth in an increasingly uncertain global economy.

As the US continues to grapple with its mounting debt, it’s worth considering action before markets react sharply, rather than trying to protect wealth after the fact. Gold and silver have long been trusted as ways to safeguard financial security. Whether you’re in the US, Australia, or elsewhere, the lesson remains the same: real, tangible assets have historically outlasted paper money.