Debt Hangover? Nah…

To start the year, the U.S. government didn’t bother with a hangover, rather it continues to spend so profligately that if we compared it to a drunken sailor, we’d have to apologize to the sailor.

Closing out 2025, America managed to rack up over $38 trillion in “official” debt. Looking at debt relative to GDP, it’s back over 121%:

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U.S. debt-to-GDP is back above 121% (Source: FRED)

Magically, too, government spending adds to the nation’s GDP rather than “crowding out” from the private sector.

Our PSA to start the year: Countries with debt-to-GDP ratios over 120% tend to be susceptible to a crisis that results in austerity measures, capping future GDP growth.

Historically only countries with high personal savings rates can avoid crises at these levels.

Alas, we can expect even more profligacy in 2026 as President Trump pushes his global realignment agenda and hands out incentives — like tariff rebates — to voters ahead of the midterms.

~ Addison

P.S. Grey Swan Live! returns from its holiday hiatus this week. Our guest this week will be Matt Smith, publisher at Casey Research. Matt and co-author Doug Casey have just released a new book titled “The Preparation.” Stay tuned, details to come…

Members can access the 2026: Something Wicked This Way Comes episode of Grey Swan Live! with Dan Amoss replay in the members-only archive of the Grey Swan Investment Fraternity site here.

Closing out 2025, America managed to rack up over $38 trillion in “official” debt. Looking at debt relative to GDP, it’s back over 121%:

Turn Your Images On

U.S. debt-to-GDP is back above 121% (Source: FRED)

Magically, too, government spending adds to the nation’s GDP rather than “crowding out” from the private sector.

Our PSA to start the year: Countries with debt-to-GDP ratios over 120% tend to be susceptible to a crisis that results in austerity measures, capping future GDP growth.

Historically only countries with high personal savings rates can avoid crises at these levels.

Alas, we can expect even more profligacy in 2026 as President Trump pushes his global realignment agenda and hands out incentives — like tariff rebates — to voters ahead of the midterms.

~ Addison

Members can access the 2026: Something Wicked This Way Comes episode of Grey Swan Live! with Dan Amoss replay in the members-only archive of the Grey Swan Investment Fraternity site here.

With the United States conducting what the Pentagon politely calls an “operation” against Iranian military infrastructure, markets have had every reason to be panicky. Instead, the past week delivered something subtler…

Gold has been consolidating after a powerful multiyear rally. Yet with America’s gold reserves equal to only about 3% of federal debt, the metal could still have significant upside ahead.

The Federal Reserve can print money, but it can’t print oil. As energy prices surge and supply disruptions loom, the central bank may find itself with limited tools to fight inflation driven by real-world shortages.

The plan to release 172 million barrels from the Strategic Petroleum Reserve would leave the U.S. with its smallest stockpile of emergency oil in more than four decades. And with tensions simmering globally, the shrinking reserve raises uncomfortable questions about how prepared the U.S. is for the next supply disruption…

Gold has been consolidating after a powerful multiyear rally. Yet with America’s gold reserves equal to only about 3% of federal debt, the metal could still have significant upside ahead.