US Debt Is Nearing $40 Trillion — Why One Fund Manager Says Gold Moves First, and Bitcoin Follows

US national debt is closing in on $40 trillion, with roughly $3.5 trillion of that added in just the last 18 months, pushing the debt-to-GDP ratio to around 123%. Lawrence Lepard, managing partner at Equity Management Associates, argues the arithmetic behind that load — interest payments alone now exceed $1.3 trillion a year, more than the government spends on Medicare or Medicaid individually — makes it structurally difficult for the Federal Reserve to hold a genuinely hawkish line for long, regardless of what officials say publicly.

Lepard’s framework doesn’t require picking a specific trigger. He sees two paths from here — either inflation stays elevated until the bond market forces some form of yield control, or a shock elsewhere forces the Fed’s hand through a liquidity backstop. Both paths, in his telling, land in the same place: a larger Fed balance sheet and more currency in circulation. His read on the sequencing, based on how the 2020 stimulus played out, is that gold and silver typically reprice first, with Bitcoin lagging by months before catching up sharply. As he put it: “Gold moves first, silver moves first, and Bitcoin follows.”

He points to a data detail worth noting on its own: even with Bitcoin down roughly 50% from its October 2025 high, spot Bitcoin ETF holdings have only pulled back about 10% — a gap suggesting newer institutional holders haven’t been the ones selling into the drawdown. None of this is a call to try to time a specific entry point. But it’s a useful reminder of why a plan that already holds real diversification — traditional assets alongside a measured allocation to modern instruments — doesn’t need to guess which one moves first.