US debt is heading towards 40 trillion USD! Wall Street big shots warn of "liquidation moment", how should investors "avoid the storm"?

The scale of the US debt has been skyrocketing, and it is about to touch the 40 trillion dollar mark. Goldman Sachs CEO David Solomon has issued a clear warning that this years-long debt expansion may be approaching its final "day of reckoning," and other Wall Street bigwigs have also been issuing warnings. In the context of increasing market uncertainty and accumulating risks, how to find safe havens for assets has become the most pressing concern for investors. "The day of reckoning will come" In late October last year, Solomon pointed out at the Washington Economic Club that since the financial crisis, US debt has continued to soar and this trend has not slowed down. He said at that time, "In the past 15 years, after the financial crisis, our debt has soared from 7 trillion to 38 trillion dollars. And in the remaining years of this decade, only refinancing these debts... based on current interest rates, the debt scale will inevitably climb to over 40 trillion dollars." He also pointed out that without significant economic growth, there will be a "day of reckoning." Since Solomon made this prediction, US national debt has increased by 1 trillion dollars, currently standing at around 39 trillion dollars. White House National Economic Council Director Kevin Hassett stated that the recent outbreak of the Iran war has increased US debt by 12 billion dollars in just three weeks. In addition, the Trump administration has requested an additional 1.5 trillion dollars in funding for the US Department of Defense as part of the 2027 budget. If this plan is implemented, US debt is likely to exceed the 40 trillion dollar mark. According to reports, US Defense Secretary Mark Esper confirmed that the US Department of Defense has requested an additional budget of about 200 billion dollars from Congress to support operations against Iran. If the war continues, this number may increase further. Solomon believes that the way out is to "seek a path to growth", otherwise, after experiencing this heavy period of debt and high inflation, there may be a painful adjustment. The worrying issue is not just the total amount of debt. Higher debt means the need for more buyers, and if demand from foreign buyers weakens, the burden will increasingly fall on Americans. Solomon said, "We must find people willing to buy and fund our debt. If debt continues to grow, it will eventually not flow to other parts of the world, but to us, which will squeeze investments, ultimately slowing down economic growth, which could become a problem." Cutting spending seems to be an obvious solution, but Solomon believes that this may be easier said than done. He pointed out that "aggressive" fiscal stimulus measures have become "deep-rooted" in the US economy, and "we seem unable to retract them." Warnings from Wall Street heavyweights The energy crisis and interruption of shipping in the Strait of Hormuz caused by the war will not only bring economic pressure to consumers and raise household heating costs, but also pose a serious financial burden on the US national government. According to reports, as of mid-March, gasoline prices have risen by 80 cents per gallon. Due to the rise in fuel prices, ticket prices have also increased. Subsequently, according to data from the American Automobile Association (AAA), in early April, the average gas prices at gas stations reached 4 dollars per gallon. Given these indicators and other economic pressures, other financial experts predict that US debt could significantly increase, far exceeding the 40 trillion dollar level. Peter Schiff, known for successfully predicting the 2008 financial crisis, recently posted that "before Trump leaves office, US debt could reach 50 trillion dollars." Ray Dalio, founder of the world's largest hedge fund Bridgewater Associates, warned that the US is heading towards a "debt death spiral": the US government must continue to borrow to pay interest - this vicious cycle will become more serious over time. Dalio does not believe that direct default will occur, but he sees another danger: currency devaluation. He said, "There won't be a default - the Fed will intervene, we will print money and buy. That's the reason for currency devaluation." JPMorgan Chase CEO Jamie Dimon also called this level of debt "unsustainable." Like Solomon and Dalio, he believes that this "will eventually have consequences, because you can't keep borrowing endlessly." Larry Fink, CEO of the world's largest asset management company BlackRock, also expressed concern. In an interview in January, he said, "US debt has exceeded 38 trillion dollars and continues to rise. One day, this will have an impact and be reflected in confidence in US markets. If foreign buyers hesitate, we may see low inflation but high interest rates because of high deficits, and financing will become more difficult." High debt exacerbates inflation and weakens the purchasing power of the US dollar - Americans have already felt this trend. According to data from the Federal Reserve Bank of Minneapolis, the purchasing power of 100 dollars in 2025 is equivalent to 12.05 dollars in 1970. How should investors respond? To protect investments from the impact of risks, Dalio emphasized the importance of diversification in investments, and particularly highlighted an asset that has stood the test of time. He said last year, "Gold is often not present enough in people's investment portfolios. When the economy is not doing well, gold is a very effective tool for risk diversification." Gold is seen as a reliable safe haven asset. It cannot be printed out of thin air like fiat currency, and because it is not tied to any single country, currency, or economy, investors flock to gold during times of economic turmoil or geopolitical uncertainty, thereby raising its value. Dalio believes that professionals are taking action accordingly. He said that central banks around the world are "now buying gold to diversify risks", and he believes that individual investors should "prudently" consider allocating "10% to 15%" of their portfolio to gold. Market performance also confirms this view. In January, amid increased economic uncertainty, the price of gold once reached a high of $5419.80 per ounce. Dimon even said recently that in the current environment, the price of gold could "easily" rise to $10,000 per ounce. In addition to gold, real estate has long been one of investors' preferred assets for protecting and growing wealth during inflationary periods. When inflation rises, property values usually also rise, reflecting the increase in costs of materials, labor, and land. At the same time, rental income often increases, providing landlords with a source of income that can withstand the impact of inflation. Of course, high property prices can make home buying more challenging, especially when mortgage rates remain high. In addition, managing tenants, conducting maintenance and repairs can also take up time and profits. Alternative assets are also worth considering. A prominent example is Post-War and Contemporary Art. From 1995 to 2025, its performance has outperformed the S&P 500 Index by 15%, while its correlation with traditional stocks is nearly zero.