The US debt amount recently passed the $22 trillion milestone. An increasing number of analysts are warning of a point of no return. This is when the debt has reached a point where it is no longer manageable.
The chart above shows the increase of debt over 10 years. As of 28 Feb 19, the total amount of US debt is $22,115,526,445,599.07. The chart does not show any signs of a slowdown of increase.
Debt occurs when the budget is running on a deficit. While this will drive economic growth due to the flowing of liquidity into the businesses, problems may surface as the debt increases. With a huge debt amount, confidence may drop as debt holders question the ability for repayment. More interest may then be required to attract demand. This adds downside pressure on the US dollar.
The Road Ahead
While it is unlikely to have an immediate impact on the US dollar, we may be seeing a gradual shift away from the green buck. Demand stems from the confidence and stability of the currency and it’s country’s economy. The clock is ticking.