Navigating Debt and Inflation

Tom welcomes back Greg Weldon, a seasoned financial market veteran and publisher of The Global Macro Strategy Report . They discuss the critical themes shaping the global economy in 2025. Highlighting Scott Bessent's remarks, Weldon explains that the U.S. government will never default on its debt, and instead will perpetually devalue the currency to service its obligations. He warns that the country has however crossed a "macro event horizon," where it is trapped in a gravitational pull of debt that grows unsustainably relative to GDP. Weldon points to $54 trillion in combined public and household debt—186% of GDP—as evidence of this precarious situation. With foreign buyers losing appetite for U.S. assets, the Fed may become the last resort buyer of Treasuries, perpetuating the cycle of money printing. He notes that foreign ownership of U.S. bonds remains low, leaving domestic institutions to absorb much of the burden. The conversation delves into inflation and its drivers. Weldon argues that while energy prices remain subdued due to base effects, food inflation and service sector pressures pose significant risks. He also questions whether higher inflation expectations can be anchored, given the Fed's challenges in balancing monetary policy with economic growth. Weldon predicts that the Fed will increasingly prioritize preventing debt deflation over controlling inflation, leading to further dollar depreciation. Weldon expresses skepticism about a gold-backed dollar or bond solution, noting that U.S. gold reserves are insufficient to cover deficits meaningfully. Instead, he highlights gold and silver as potential beneficiaries of currency debasement, with silver poised for a breakout after years of underperformance. He also touches on global trends, such as Europe's rise as a safer haven and the BRICS nations' growing interest in dollar system alternatives. Ultimately, Weldon paints a picture of a world teetering on debt-driven instability, where central banks are forced to choose between reflating economies or facing collapse. Time Stamp References:0:00 - Introduction0:45 - Bessent & Default Risk4:55 - Moody's Downgrade7:12 - U.S. Debt Refinancing9:40 - Foreign Debt Buyers?12:20 - Japan's Bond Issues15:03 - Solutions & Gold Std?16:55 - Equities & Silver20:30 - The Fed Catch 2224:25 - Fwd Inflation Drivers?27:54 - Debt Saturation & Ceilings34:50 - Polarization & Extremes38:50 - Wrap Up Guest Links:Website: https://www.weldononline.com/X: https://x.com/WeldonLIVEMoney Podcast: https://x.com/money_podcastYouTube: https://www.youtube.com/@GregoryWeldonE-Mail: sales@weldononline.com Greg Weldon is a veteran in the global financial markets industry with over 40 years of experience. He started his career as a floor trader on the COMEX and later worked as a broker for Lehman Brothers and Prudential Securities. He then became a proprietary money manager for hedge funds Moore Capital Management and Commodities Corporation. In 1998, he founded Weldon Financial and has been producing independent research ever since. His clients include top hedge funds, banks, government agencies, and individual investors. WeldonLIVE, his flagship service, provides a comprehensive market research report, including live commentary. The service covers global economic reports, supply-demand fundamentals, monetary trends, and their impact on stock, bond, currency, and commodity markets. Weldon combines a top-down macro approach with technical analysis to offer a broad view of market trends. He provides market recommendations in sectors such as stock indexes, metals, currencies, fixed-income, energy, and commodities.