Elon Musk warns US of financial emergency as national debt soars

Tesla CEO Elon Musk recently raised concerns over what he terms a "financial emergency," citing that U.S. government interest payments have now surpassed $1 trillion annually, even exceeding the Defense Department's budget. Speaking at a Trump campaign rally, Musk pointed out that these interest payments now consume 23 per cent of all federal tax revenue, as the national debt climbs to $35.7 trillion. Analysts from Bank of America estimate the debt could hit $36 trillion by year-end, with increases of around $1 trillion every 100 days.

This debt surge primarily stems from Covid-era stimulus spending, which contributed to inflation and prompted the Federal Reserve to raise interest rates significantly. Current projections suggest further annual deficit increases, with analysts forecasting additions of $500-600 billion under various policy scenarios.

The rising debt has led investors to seek refuge in alternative assets, pushing both Bitcoin and gold close to record highs. Bitcoin is approaching its all-time high of $70,000, as many investors view it as "digital gold" amid inflation fears. Famed investor Paul Tudor Jones, who previously described Bitcoin as the "fastest horse to beat inflation," has also reiterated warnings about a looming "debt bomb" due to what he calls "fiscal recklessness."

Tesla remains heavily invested in cryptocurrency markets, holding approximately 10,000 Bitcoin valued at around $800 million. Recently, Tesla transferred its Bitcoin holdings to new wallets, sparking speculation about potential sales. This move underscores the increasing attention on Bitcoin as a hedge against inflation, especially as the Federal Reserve faces the challenge of balancing inflation control with managing the nation’s swelling debt.

Elon Musk warns US of financial emergency as national debt soars