Daily Perspective: April 24th

The debt ceiling is a topic that comes up periodically with the government. It's not something that people usually think about in the short term, but it's important to understand how everyone might act given the information.

The US dollar is the global reserve currency, and we have the ability to print dollars when necessary to fill our deficit. We can run a deficit because people need to have dollars to trade and save in dollars, which means they still have to buy government bonds.

In the long term, the debt will get taken care of. This short term “circus” is just a fight over money with both sides bargaining to get different things for special interests that fund their campaigns.

The money will get taken care of because we can print it, and/or global companies and countries currently have to save in our currency to buy the global goods they need for their country. Even if the US cut its spending down to the bone, it still wouldn't solve the overall problem of the debt. The only way to get out of all this debt is to outgrow it at something like north of 10% a year as an economy (not likely) or inflate it away (extremely likely).

As an investor, it's important to think about protecting your assets from inflation. Assets that are fixed in supply, like gold, real estate, and bitcoin, or assets that are growing at a higher rate than the assumed future inflation rate, are good options to consider in my opinion.

While the debt ceiling may seem like circus noise in the short term, it's important to understand its implications and how to protect your assets.

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