In scientific circles, the term “event horizon” is often used to describe the boundary of a black hole’s immense gravitational field. Crossing the event horizon is a point of no return, where the black hole’s gravity makes escape impossible. It is a place where you would need to expend ever more energy in a futile effort to avoid being pulled in. There is no return from this boundary, and we are nearing our own fiscal event horizon. The national debt is soaring above $38 trillion, a $2.5 trillion increase from this time last year.
The Suck Zone
My wife and I often laugh at the 1996 movie Twister with Helen Hunt and Bill Paxton. In the film, they speak in hushed tones about being in a level F5 tornado, as if it were like surviving a trip through Dante’s Inferno.
“The suck zone. It’s the point, basically, at which the twister sucks you up.”
In the movie, the suck zone is the Earth-bound equivalent of a cosmic black hole’s event horizon. It is a point of no return, and it is not just a theory in astrophysics, meteorology, or finance.
The Event Horizon and the Suck Zone are useful ways to picture our current problem with the huge national debt, where every year we have to borrow more to prevent falling into a black hole of currency collapse. We get it, and our opponents do too, but no one in Washington dares to admit it or act on it.
The Unknown Boundary
Unfortunately, identifying the outer boundary of the debt event horizon has become difficult. In this fast-moving world where money, debt, interest rates, derivatives, crypto, and exchange rates fluctuate in real time, it’s uncertain how far you can push your national debt and what the outcomes will be. However, history shows there is a limit, but we might only realize it after the fact.
The U.S. has benefited from significant foreign ownership of U.S. Treasuries, but that is changing as China, Russia, and other BRICS countries shift toward gold, silver, and other Tier 1 assets. Even friendly nations like Japan are moving away from the dollar, but for different reasons. Each nation has its own incentives, but the trend is unmistakable: global demand for Treasuries is weakening, and that shift is structural and not temporary.
This trend can also be seen in the Federal Reserve’s actions, as it acts as the “buyer of last resort” in Treasury auctions. The more debt the Fed purchases, the closer we move to the fiscal and monetary event horizon. Every Treasury auction in which demand falls short forces the Fed to absorb the shortfall. That becomes the fiscal equivalent of burning more “energy” to stay in place, a sign we are approaching an event horizon.
We Cannot “Japanify” Our Way Out
Optimists often highlight Japan’s high debt-to-GDP ratio as a positive example. However, a key difference between the US and Japan is the savings rate. In America, ours is only 4%, while in Japan, it’s closer to 25%. In my view, the Japanese are less reliant on foreign debt buyers, which makes them more resilient in funding their own debt. Japan’s households are high-savings and low-debt; we are the opposite.
The Bank of Japan’s recent interest rate hikes have also kept Japanese money at home. Investors no longer need to go overseas to get a decent return on their savings. This creates a problem for us because Japanese savers used to be a source of funding for our national debt.
This increase in interest rates quickly ended the Yen Carry Trade, removing arbitrage opportunities that had existed for years for foreign investors. Stopping the Yen Carry Trade also reduces demand for Treasuries and forces the Fed to raise rates to sell bonds. This directly affects our national debt by raising borrowing costs. Japan has shifted from a passive to a more aggressive monetary stance, and we are feeling the consequences in the form of higher borrowing costs.
Japan has demonstrated that it can sustain a debt-to-GDP ratio of about 250% without collapsing. We share some fiscal and demographic traits, including an aging population and high spending on domestic social programs. We are also adopting some of the strategies that have enabled them to continue functioning without falling apart. One notable trait is that the Bank of Japan owns more than half of its government debt and about 7% of all common stocks, although it is working to unwind this position.
But there are many differences between the two nations. Japan has deflationary demographics, partly due to an aging population and partly due to strict immigration policies. However, their population is shrinking, resulting in fewer workers caring for the elderly and fewer to pay the interest on their debt.
The BOJ can monetize without triggering capital flight given its unique demographics, and such actions are viewed as stabilizing rather than destabilizing. Japan is not the world’s reserve currency, and most of its debt is held by those who benefit from its monetization.
Danger for Capitalism
And in recent months, we have seen the Federal Government demanding a stake in companies it subsidizes, a risky trend. When the Federal Government takes this action, it sends a negative signal to the economy because it supports companies that might need to fail. They took similar action in 2008 during the Great Financial Crisis, and thankfully, it worked out. However, that was a time when the national debt was less of a concern.
Companies like Intel have expressed a desire to exchange equity for a bailout. We also see ChatGPT indicating that it considers itself a strategic asset and would seek a government bailout if it fails. Intel and ChatGPT are treating the Federal Government as a shareholder, which is a risky outlook. The recent replacement of Anthropic as the Department of War’s AI provider marks a step toward making ChatGPT “too strategic to fail.”
We are setting a dangerous precedent when the Federal Government becomes a participant rather than a regulator in markets. In my view, unless these equity stakes have an expiration date, we are crossing a line in capitalism where the Federal Government can exert outsized influence over markets, companies, and industries. President Trump may see this as dealmaking, but his successors might not. This is creeping state control, and we do not know where that event horizon is.
We must remember that the Federal Government is essentially bankrupt. So, we are financing stock purchases with debt; we are buying stakes in major companies on margin, and we must include the interest costs in our calculations. It seems the Federal Government might require equity stakes in all future major subsidies, which is a risky move. Either way, subsidy or ownership, it increases our debt further.
The War in Iran
World events do not always occur at convenient times. We now face the War in Iran, a conflict with an uncertain duration and costs. Regardless of how long it lasts or what it costs, it will push the national debt higher through increased spending, higher interest rates, and shaken confidence in the dollar. There is also talk of quantitative easing to help consumers and to “grease the skids” as we approach the election. We do not have the reserves to do any of this without taking on more debt. Wars accelerate the approach to a fiscal event horizon by forcing emergency borrowing precisely when borrowing capacity is shrinking.
Inflation is another issue caused by the war. Increased military spending, gas shortages, and the threat of terrorism at home all drive inflation and shake confidence. How much patience consumers will have for all of this will become clear in the midterm elections.
All Roads Lead to Gold
Recently, market pressures that kept gold and silver subdued have eased. Gold is rising due to global tensions, high inflation, and money printing in the US. Despite many criticisms over the years, gold is once again proving its role at the heart of the world’s monetary system. It remains the global “currency” when everything else fails.
Silver is on a similar path, but for different reasons. Silver’s value is partly monetary and partly in manufacturing. It is in short supply, and this will continue as long as we need weapons and energy. Silver may be considered a lesser alternative to gold, but it cannot be ignored and will have a role in the global monetary system, either directly or indirectly.
Gold and silver are not rising in price; the dollar is losing value against these timeless metals. This process has occurred repeatedly throughout history as politicians devalue their currency. It’s not complicated; it’s history and math.
Danger Will Robinson
Another space-related metaphor comes to mind in this discussion from the 1965 television show Lost In Space. The young boy in the series was named Will Robinson, and when danger lurked nearby, the family robot would proclaim, “Danger, Will Robinson.”
But followers of the series know the phrase was spoken only once. On all other occasions, the robot just said, “Danger, Danger.” Our Federal Debt Event Horizon is lurking, and we can see it coming. Like with the “Suck Zone,” we have time to drive away or act before the danger arrives. Like the “Event Horizon” as you approach a black hole, we have time to turn the ship. The national debt is saying “Danger, Danger,” but is anyone listening?
The key question is whether Congress will have the courage to take the necessary actions to prevent crossing our own event horizon of a currency collapse. Can they keep us out of the “Suck Zone?”
Resources and Further Reading
America’s Chip Resurgence: Over $640 Billion in Semiconductor Supply Chain Investments. Semiconductor Industry Association, semiconductors.org, January 30, 2026.
Federal Debt: Total Public Debt as Percent of Gross Domestic Product, Federal Reserve Bank of St. Louis, fred.stlouisfed.org, Last accessed March 1, 2026.
FY2025 Debt Increased by $2.2 Trillion, Stands at Over $37.6 Trillion, US Congress Joint Economic Committee Republicans, jec.senate.gov, October 1, 2025.
Gross Domestic Savings (% of GDP) – Japan, World Bank Group, worldbank.org, 2024.
Intel and Trump Administration Reach Historic Agreement to Accelerate American Technology and Manufacturing Leadership, by Intel Media Relations, Intel, intc.com, August 22, 2025.
Intel Equity Deal Changes CHIPS Funding Structure, BMGstrategies, bmgstrategies.com, August 2025.
Japan – BOJ Holdings of ETFs, MacroMicro, en.macromicro.me, Last accessed March 8, 2026.
Personal Income and Outlays, December 2025, Bureau of Economic Analysis, Department of Commerce, bea.gov, February 20, 2026.
The Curious Case of the Yen as a Safe Haven Currency: A Forensic Analysis, by Dennis Botman, Irineu de Carvalho Filho, and W. Raphael Lam, Printed by International Monetary Fund, imf.org, November 2013.
The End of Carry Trade: Implications for Global Economy, Finance and Geopolitics, Geopolitics, geopolitika.com, December 17, 2025.
The end of the ‘carry trade’? How Japan’s yen could be ripping through U.S. stocks, by Sam Mcredith, CNBC, cnbc.com, August 2, 2024.
U.S. government takes 10% stake in Intel, as Trump expands control over private sector, by Kif Leswing, CNBC, cnbc.com, August 25, 2025.
US Debt to GDP Ratio 2025 | Statistics & Facts, The World Data, The Insight Hub, theworlddata.com, November 1, 2025.
