Why the real threat to your wealth isn’t tariffs: It’s the exploding US debt [Video]

In this episode of the Money Metals Midweek Memo, host Mike Maharrey delivers a sharp rebuke of the financial media's obsession with tariffs and trade wars. 

While headlines scream about the latest deal or tariff suspension, Maharrey argues that investors are dangerously distracted from the real threat: America’s exploding national debt and the systemic consequences that follow.

He warns that the U.S. is barreling toward a fiscal cliff, and most people aren’t paying attention because they’re fixated on the wrong issues.

Tariffs are just a distraction

Every time markets move, pundits rush to attribute the cause to tariffs.

If stocks fall, it's because of tariff fears. If they rise, it must be due to a pause in tariffs or the announcement of a new trade negotiation. Just recently, the Dow jumped more than 700 points after news broke that the EU and the U.S. were discussing a potential deal. Meanwhile, gold dropped by $50.

But Maharrey calls this fixation misplaced. Investors selling gold just because of a temporary trade headline are reacting emotionally, not strategically. He emphasizes that tariffs, while economically significant, are just one factor—and probably not the most important one.

They’re a single tree. The debt crisis, he says, is the forest.

The national debt is the real crisis

As of late 2024, the U.S. national debt exceeded $36 trillion.

That number continues to rise with no political will to stop it. Yet the issue garners little attention. Maharrey believes this is partly because debt alarm bells have been ringing for decades, and nothing seems to have collapsed—yet.

Many assume the problem is overblown. But he insists the day of reckoning is coming.

Interest payments alone are already squeezing the federal budget. In April 2025, the U.S. paid $11.7 billion in interest. For the fiscal year so far, that number has hit $684.1 billion, marking a 9.5% increase from the previous year.

More is now spent on interest than on national defense or Medicare. The only larger expenditure is Social Security.

This should alarm everyone.

Credit rating downgrade: The wake-up call no one heard

While on vacation, Maharrey saw headlines that Moody’s had downgraded U.S. debt from AAA to AA1.

His reaction? “Gee, thanks.”

He says the downgrade wasn’t news to anyone who’s been paying attention. Moody’s justified the move by pointing to Congress’s failure to reverse the trend of massive deficits and rising interest costs.

This wasn’t a sudden shift. Moody’s had already dropped its U.S. credit outlook to “negative” back in November 2023, and issued a damning report in March 2024 warning that America’s fiscal strength was in a multi-year decline.

Now, all three major credit agencies have lowered the U.S. rating. S&P downgraded in 2011, Fitch in 2023, and now Moody’s has joined them.

Debt ceiling drama is political theater

Maharrey dismisses the debt ceiling as a complete charade.

He traces its origin back to 1917, when Congress first imposed a cap of $11.5 billion as part of the Second Liberty Bond Act. Since then, it has become a hollow political ritual. Between 1962 and 2011, lawmakers raised the ceiling 74 times.

More recently, they’ve resorted to suspending it altogether. The most recent “big beautiful bill” includes a $5 trillion debt ceiling hike.

This proves, Maharrey argues, that there’s no serious intent in Washington to restrain borrowing. The ceiling exists as a stage prop, nothing more. Politicians grandstand, hold press conferences, and then quietly vote to raise it—every single time.

The bond market is starting to shake

The bond market is already showing signs of stress.

After the Moody’s downgrade, the 10-year Treasury yield rose to nearly 4.6%, and the 30-year approached 5%, levels not seen in nearly two decades. These rising yields signal one thing: investors are growing less willing to lend to Uncle Sam.

Falling demand means lower bond prices. And lower bond prices mean higher yields.

That’s bad news for a government that needs to refinance mountains of debt. There’s $700 billion in Treasuries maturing within the next year, and $1.45 trillion more over the next five years.

All of it will need to be rolled over at significantly higher interest rates.

Maharrey compares this to a Ponzi scheme. The government must constantly borrow more—not just to fund new spending, but also to pay off old debt.

There’s no off-ramp. The exit was missed a long time ago.

The Federal Reserve’s only option: Monetize the debt

With traditional borrowing costs surging, the Fed’s only real option is to monetize the debt—to step into the bond market and start buying U.S. Treasuries again.

This strategy is known as quantitative easing. The Fed creates money out of thin air, uses it to buy government debt, and holds those bonds on its balance sheet. By doing this, it artificially boosts demand and suppresses yields.

This isn’t theory. It already happened.

Between March 2020 and May 2021, the Fed bought $2.44 trillion in Treasuries to finance pandemic-era stimulus. No entity—foreign or domestic—bought more U.S. debt than the Fed.

And that’s exactly what Maharrey predicts will happen again.

QE means inflation is coming (again)

When the Fed buys bonds with newly created money, the money supply increases. That is inflation—by definition.

During the Great Recession, much of that new money stayed in financial markets. The result was asset inflation: rising stock and bond prices. 

During the pandemic, the money hit consumers directly—via stimulus checks and spending programs—and drove up consumer prices.

Either way, it’s inflation.

Even today, Maharrey notes, the money supply is growing again. That means inflation is already rearing its head, even if official CPI numbers stay flat. This time, we may be heading back toward another asset bubble.

Why Gold and Silver matter more than ever

None of this would be possible under a sound money system.

If the dollar were backed by gold or silver—or even clams, Maharrey jokes—there would be a natural limit on borrowing. But fiat currency removes all restraint. That’s why the Fed can create money and governments can borrow endlessly.

Gold and silver are real money. They are immune to the printing press.

When the bond market crashes, Maharrey argues, capital will flee from bonds, not to them. That money has to go somewhere—and much of it will flow into precious metals.

This is already happening. Central banks around the world have been quietly buying gold, diversifying out of the U.S. dollar. A sovereign debt crisis would only accelerate this trend.

Conventional wisdom doesn’t apply anymore

Traditionally, rising yields are seen as bearish for gold because the metal pays no interest.

But Maharrey argues this logic breaks down in a debt crisis. When investors lose confidence in U.S. bonds, they won’t care about yield—they’ll care about safety.

And gold remains the ultimate safe haven.

This isn’t theoretical. The rally in gold over the last 18 months shows that markets are already sensing what’s coming. The shift is slow now, but as Maharrey warns, these things tend to happen “slowly, then all at once.”

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