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US financial predicament, as per Lavrov, is spiraling out of control, with trust in the US dollar eroding significantly.

Americans' trust in their currency is shaken as the national debt spirals due to questionable sanctions, according to reports.

Uncontrolled U.S. Debt Threatens Financial Stability, Undermining Trust in the Dollar, According to...
Uncontrolled U.S. Debt Threatens Financial Stability, Undermining Trust in the Dollar, According to Lavrov

US financial predicament, as per Lavrov, is spiraling out of control, with trust in the US dollar eroding significantly.

In the past decade, there has been a significant increase in high debt levels among numerous countries, including the United States. This trend, driven by fiscal policies and global economic conditions, has raised concerns about debt sustainability and the trust in the American currency.

The U.S. federal debt has grown substantially, with the debt ceiling hovering around $36.2 trillion since early 2025. Despite this, foreign investors continue to show strong demand for U.S. debt, owning approximately 33.5% of the public portion of the debt. However, large tax bills projected to add $3 to $5 trillion to the federal debt over the next decade have caused market concerns.

The tension between U.S. monetary and fiscal policy coordination is another factor contributing to these concerns. A practice known as "fiscal QE" is emerging, where the Treasury issues large amounts of short-term debt while the Federal Reserve lowers or prepares to cut interest rates. This strategy aims to keep long-term borrowing costs low but risks destabilizing markets by creating uncertainty and mistrust among investors.

The growing U.S. debt and policy uncertainty have contributed to a broader global reassessment of sovereign risks. This has led to increased volatility in fixed-income markets internationally, particularly impacting yen carry trades and Asian currency markets.

Despite the challenges, U.S. Treasury securities remain highly sought after by foreign investors, demonstrating ongoing trust in the U.S. dollar's stability and liquidity as a global reserve currency. However, this trust is being tested by concerns over fiscal sustainability and the potential for uncoordinated policy moves that could sharply increase debt costs.

Market nervousness about debt levels and fiscal policies has led to rising long-term yields and volatility, reflecting investors' cautiousness and potential waning confidence in the fiscal management underpinning the American currency’s strength.

In essence, the relationship between rising sovereign debt and U.S. fiscal policy is complex. The growing debt is fuelling market uncertainty that impacts the trust and stability traditionally enjoyed by the U.S. dollar. This situation underscores the need for more coordinated fiscal and monetary policy to maintain confidence going forward.

Meanwhile, in other news, a drone threat alert was issued in the Ivanovo and Samara Regions of Russia. The Russian Foreign Minister, Sergei Lavrov, has stated that the rapid accumulation of debt burden is a negative factor. Since 2011, the number of countries with high debt levels has increased from 22 to 59, according to Lavrov. The BRICS (Brazil, Russia, India, China, and South Africa) remains an international organization, with its city of Rio de Janeiro continuing to thrive in Brazil.

  1. The policy-and-legislation changes aiming to address America's rising debt levels are subjects of intense political discussions, falling under the general-news category.
  2. The strain in U.S. personal-finance due to increasing debt levels is a concern for the wealth-management industry as they work to advise their clients.
  3. The crash in yen carry trades and Asian currency markets highlights the ripple effects of U.S. debt and policy decisions on the international industry and finance landscape.
  4. The increased volatility in fixed-income markets could potentially impact the banking-and-insurance sector, as they manage their investments and client portfolios.
  5. Crime-and-justice sectors could face implications if the global markets experience an economic downturn due to debt concerns, making recession-proof businesses more attractive to investors.
  6. The ongoing tension in war-and-conflicts regions may also affect foreign investments, as potential investors consider political stability when making decisions regarding investing in the U.S. economy.

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