The United States is embroiled in an intense election campaign in which major financial players are positioning themselves to benefit whoever is elected at the ballot box. I analyzed it New York Times In a series of financial moves called the “Trump Trade.”

To fuel the fire of uncertainty, Elon Musk predicted a major public debt crisis in the United States that would impact interest rates, increase inflation, and cause the rise of bitcoin and gold as safe-haven values. Judging by the increase in their prices, those who invested in these securities were already aware of this.

“Financial emergency” according to Elon Musk. In this context of financial uncertainty, Elon Musk, once the richest person in the world, warned about the huge debt of the USA in his profile in X, predicting that the country would be doomed to bankruptcy if Trump was not elected.

Elon Musk reacted with his message to economist EJ Antoni’s sharing of a chart on the development of the US debt. “The federal debt exploded on the first day of the new fiscal year, rising by $204 billion to $35.669 trillion, but the situation is getting worse: the Treasury was also forced to reduce its cash balance by $72 billion, or more than $275 billion. Red numbers in a single day.” explained the economist.

COVID-19 debts. U.S. debt has increased in recent years as a result of stimulus measures implemented by the Biden administration during the COVID-19 pandemic. These measures triggered an inflationary trend that forced the Federal Reserve to raise interest rates. Just a month ago, the Federal Reserve signaled the end of this cycle by announcing interest rate cuts in the coming months.

Speaking at a recent rally with Donald Trump at Madison Square Garden in New York, the millionaire described his debt situation as a “financial emergency.” Musk said, “Debt interest payments alone represent 23% of all federal tax revenues,” and claimed that the “Department of Government Efficiency” he will manage will save two trillion dollars in the federal budget. Official data from the US Congressional Budget Office estimates that the interest on this debt is approximately $870 billion annually.

Bitcoin and gold as a safe haven. Economic uncertainty and increased debt in the face of a recession scenario cause some investors to turn to safe haven values ​​such as gold and bitcoin, and demand increases rapidly. Forbes. Investments in safe haven securities will protect them from hypothetical increases in interest rates and inflationary scenarios.

“This will be a very positive development for Bitcoin, especially after the US elections, as both the Republican and Democratic Parties have failed to adequately address America’s rising debt and deficits during this election,” said CK Zheng, chief investment officer of ZX Squared Capital. Forbes.

The answer didn’t take long to come. In response to the short-term uncertainty environment, investors turned their financial movements towards values ​​​​considered as a safe haven (gold) or an instrument against inflation (bitcoin). As a result, the increase in demand has skyrocketed the prices of Bitcoin and gold.

Bitcoin price surges above $72,000; It is very close to the all-time high of $73,000 recorded in March of this year. Gold, on the other hand, continues its unstoppable rise and breaks records in its valuation.

Musk and Tesla’s Bitcoins. Elon Musk’s interest in focusing on public debt and its effects on the price of cryptocurrency is not in vain. Bitcoin has become a strategic asset for Tesla, which owns approximately 10,000 Bitcoins valued at approximately $800 million. The Elon Musk-led company is the fourth-largest holder of bitcoin among US-listed companies.

According to an analysis by Arkham Intelligence, Tesla would move these assets to new portfolios in recent weeks. These moves led to speculation about a possible sale to adjust its balance sheet. But Musk’s company still appears to view Bitcoin as “digital gold” that can serve as a shelter against inflation.

in Xataka | Elon Musk has become an unpredictable geopolitical agent. And nobody knows how to stop it

Image | Unsplash (Pierre Borthiry – Peiobty), Flickr (Ministry of Communications)