Legendary investor Jim Rogers said in a recent interview with Sputnik International that the United States had transformed from a creditor into the world’s largest debtor country in half a century.
According to Rogers, the country’s debt problem, which has reached 32.47 trillion dollars and is rapidly increasing, will eventually show its ugly face in the form of persistently high inflation and higher interest rates:
In the 1970s-1980s, the last time we had this kind of problem, interest rates were up to 21 percent on government bonds, government papers, because inflation was so bad. Now inflation is even worse. In 1980, the United States was still a creditor country. Now the United States is the largest debtor nation in world history. Of course everything seems fine now. Things have calmed down right now, but it won’t be like this forever. Someone has to pay this debt. Someone has to print more money. Someone has to borrow more money. And when you borrow large amounts, interest rates will go higher and higher. Inflation will rise because too much money will be printed.
The legendary investor warned that the country’s consistently high and rising debt will make the next economic crisis the biggest in our lives:
We had a similar problem in 2008. Next time we have a similar problem, it will be the worst problem in my life and that means the worst problem in your life too. We had a big problem in 2008 because of high debt. Debt everywhere has grown rapidly since 2009. So the next economic crisis has to be very, very serious because the debt is much bigger.
How Is The Crypto Market Affected?
Market experts and analysts point out that the realization of Rogers’ prediction will be positive for the cryptocurrency market at some point. The basis of this positive scenario is that monetary tightening will be replaced by monetary expansion.
As it is known, although the high interest rate environment has a negative effect on the crypto money market, the main disadvantage stands out as monetary tightening. However, as predicted by the legendary investor, those who want to be protected as a result of the increase in inflation as monetary tightening replaces monetary tightening in the USA can flock to Bitcoin (BTC) and altcoins. The last example of this was seen at the beginning of the new type of coronavirus (Kovid-19) epidemic in the USA, and the Fed, which started monetary expansion to support the economy, injected $ 5 trillion into the markets. This injection triggered a rally in the altcoin market, along with BTC, and set new records.