The debt ceiling debate in Washington has been widely discussed but so far, few investors are truly worried.
Most believe that when the deadline arrives, Congress and the White House will reach an agreement—even if it’s to kick the can down the road. As of now, Treasury Sec. Janet Yellen has set the deadline as June 1. There are still a few weeks left, and if history is any indication, no resolution is likely to be reached until the eleventh hour.
So far, institutional investors have not entirely balked at buying new issue U.S. Treasury bills. During the May 11 Treasury auction, four-week T-bills drew an annualized bond yield of 5.723 percent, a high but not exorbitant interest rate for bonds expiring on June 13. The eight-week T-bills were sold with an annualized yield of 4.793 percent by contrast.
Usually, longer duration paper will have higher yield. But this recent disconnect, where the four-week bills cost more than the either-week bills, reflects some concern that the June 13 T-bills won’t be paid on time while the July 11 paper will. This assumes a new debt deal will be in place by July. But even recognizing that, the 5.723 percent yield is no indication that any catastrophic debt default event is expected to pass.
What should investors do if there is indeed a debt default, or if the debt ceiling fight gets ugly and no deal is in sight?
Enter gold. Gold has approached its record high in recent weeks without much fanfare. That’s an impressive feat given that gold pays no yield and bond yields remain very high. The Gold spot price has climbed around 10 percent year to date through May 12.
There have been a few causes for gold’s recent rise. Global central banks bought 228 metric tons of gold during the first quarter of 2023, according to the World Gold Council. That’s after they collectively added 1,136 metric tons in 2022, a record year. Part of this demand has been driven by certain countries moving away from the U.S. dollar for global trade and potentially establishing a new common settlement currency.
Gold had a previous extraordinary run during the 1970s. President Richard Nixon ended the Bretton Woods system where the dollar converted into gold (at $35 per ounce) in 1971. Gold then eclipsed $850 by January 1980—a 33 fold increase. Gold served as an effective inflation hedge during a period of high inflation during the 1970s, when inflation averaged nearly 7 percent during the decade and culminated at 14 percent by 1980.
Silver, which typically outperforms gold in a bull market, increased by 7 percent to $25.01 year-to-date to May 12. Silver grew from $3 an ounce in the early 2000s and exploded to almost $50 in 2011. At around $25 per ounce today, it remains to be seen how silver will track gold and inflation going forward.
What else is in play?
Currently, the Swiss franc has proven itself to be the strongest currency and an FX haven in a volatile year for global foreign exchange market. During the last twelve months, the CHF gained more than 11 percent against the USD, while notching a four-decade high against its traditional currency haven competitor, the Japanese yen, by early May.
Global currency traders have been betting that the Bank of Japan will keep its ultra-loose monetary policy, which will keep the yen weak against a basket of global currencies. The Swiss National Bank, in the meantime, began hiking rates last year.
But is there value in holding Treasury bills or bonds?
Many investors say yes, despite the risk that America may not pay its bills on time.
Former PIMCO chief investment officer Bill Gross recently advised clients to take advantage of the one percent of extra annual yield on the shorter term T-bills despite default risk. The assumption is that a deal will definitely be reached even if the U.S. government can’t pay its obligations for a short period of time.
Article cross-posted from our premium news partners at The Epoch Times. Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.
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Safeguarding Your American Dream: Discover the Power of America First Healthcare
In today’s economy, healthcare costs remain one of the biggest threats to financial stability and family security. Americans work hard to build a better life, yet rising medical expenses can quickly erode savings, force tough trade-offs, and even push families toward debt or bankruptcy. Medical bills continue to rank as the leading cause of personal bankruptcy in the United States, with millions facing underinsurance or unexpected out-of-pocket burdens that no one plans for. Many turn to government-run marketplace plans under the Affordable Care Act, hoping for relief, only to discover that what appears affordable on paper often delivers higher long-term costs, limited real protection, and coverage that may not align with personal values or family needs.
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The allure of marketplace plans is easy to understand: open enrollment periods, premium tax credits for many households, and the promise of “comprehensive” benefits mandated by law. Yet recent data reveals a different reality, especially after the expiration of enhanced premium subsidies at the end of 2025. Enrollment for 2026 dropped by more than one million people compared to the prior year, with many shifting to lower-tier bronze plans to keep monthly premiums manageable.
These plans feature significantly higher deductibles—averaging around $7,500 nationally—and greater cost-sharing requirements. Families who once paid modest amounts after subsidies now face average premium increases of $65 or more per month, even as they accept plans that leave them responsible for thousands in upfront costs before meaningful coverage kicks in.
High deductibles create a dangerous barrier to care. Studies show that people in such plans are less likely to seek timely treatment for chronic conditions, attend preventive screenings, or fill necessary prescriptions. A seemingly minor illness or injury can balloon into major expenses when patients delay care until problems worsen. For a family of four, a single hospitalization, cancer diagnosis, or unexpected surgery can easily exceed the deductible, triggering coinsurance and out-of-pocket maximums that still leave substantial bills. One recent analysis noted that some proposed changes could push family deductibles toward $31,000 in future years, further exposing households to financial risk.
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Values alignment represents another growing concern. Government-influenced plans operate within a framework shaped by federal mandates and political priorities that may not reflect conservative principles of limited government, personal freedom, and ethical stewardship. Families who want to direct their healthcare dollars toward providers and benefits that honor traditional values sometimes find marketplace options feel misaligned, forcing a compromise between affordability and conviction.
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Practical steps exist for anyone questioning their current coverage. Start with a no-obligation review of your existing policy to identify gaps—high deductibles, limited critical-care benefits, or escalating premiums. Compare total projected costs (premiums plus potential out-of-pocket expenses) rather than monthly premiums alone. Consider family health history, anticipated needs, and lifestyle priorities. Private agencies can present side-by-side options that include stronger wellness incentives, broader access, and plans built on shared values of self-reliance and freedom.
In an era when healthcare inflation continues to outpace general cost-of-living increases, relying solely on marketplace solutions carries growing risk. Families who proactively explore private alternatives frequently achieve meaningful savings while gaining peace of mind that their coverage truly works when needed most.
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Ultimately, protecting your family’s future requires looking beyond the marketing of “affordable” government options. By understanding the long-term costs hidden in high deductibles, shifting coverage tiers, and values mismatches, Americans can make empowered choices. Private, values-driven insurance offers a smarter path—one that rewards diligence, supports wellness, and delivers real security. For those ready to move beyond the limitations of traditional marketplace plans, a simple review can reveal options designed to serve families, not bureaucracies. The American Dream thrives when individuals and families retain control over their healthcare decisions, and thoughtful private coverage plays a vital role in making that possible.