The U.S. government will have to default on some payments if Congress fails to raise the national debt ceiling before June, Treasury Secretary Janet Yellen said.
“If Congress fails to do that, it really impairs our credit rating. We have to default on some obligation, whether it’s Treasuries or payments to Social Security recipients,” Yellen said on Friday in an interview with Bloomberg.
“That’s something America hasn’t done since 1789,” she continued, referring to a time when the new-born United States failed to pay back money it borrowed to finance the war against the British Empire. “And we shouldn’t start now. So we’ve not discussed what to do.”
When asked about the speculation that her department would prioritize payments of interest and principal on Treasury securities in a default scenario, Yellen said the White House has never reviewed or approved such a plan.
“My understanding—I was at the Fed in 2011—is that this plan was never presented to the president and never approved,” Yellen told Bloomberg. In 2011, she was serving as vice chair of the Federal Reverse.
When asked if she would now present that plan to prioritize Treasuries to the president, Yellen replied, “We are working full time to work with Congress to raise the debt ceiling. That’s where our focus is.”
Yellen Warns of Credit Downgrade
The remarks comes after she argued that a U.S. government default might trigger a downgrade of its credit rating and weaken consumer confidence, similar to what happened in 2011.
“A default would threaten the gains that we’ve worked so hard to make over the past few years in our pandemic recovery. And it would spark a global downturn that would set us back much further,” Yellen said Thursday in Japan, where she was attending a meeting of finance chiefs and central bankers of G7 countries.
“It would also risk undermining U.S. global economic leadership and raise questions about our ability to defend our national security interests,” she added.
Yellen pointed to the 2011 debt ceiling crisis that prompted Standard & Poor’s to lower the United States’ long-held top-notch AAA sovereign credit rating to AA-plus. She warned that another downgrade would drive up interest rates for consumers and companies seeking loans.
“We could see a rise in interest rates drive up payments on mortgages, auto loans, and credit cards. We are already seeing spikes in interest rates for debt due around the date that the debt limit may bind,” she said.
“The U.S. Congress has raised or suspended the debt limit about 80 times since 1960. I urge it to act quickly to do so once again.”
Democrats, Republicans Blame Each Other
Yellen’s comments echo those of President Joe Biden, who criticized Republican members of Congress for wanting to tie the debt limit increase to deficit-savings measures.
“They’re literally—not figuratively—holding the economy hostage by threatening to default on our nation’s debt,” Biden said Wednesday of what he called “extreme MAGA Republicans.”
Although the Biden administration insists that Congress pass a “clean” debt ceiling increase, almost every major debt ceiling agreement in the past 30 years had at least some kind of deficit-reduction law attached to it, including the 1993 Deficit Reduction Act under the Clinton administration, and the 2010 Pay-As-You-Go Act and the 2011 Budget Control Act under the Obama administration.
Republican congressional leaders remain cautious on defaulting national debt, as the nation’s top Republican, former President Donald Trump suggested that it’s better to let the U.S. government default than passing a budget that doesn’t include spending cuts.
“I say to the Republicans out there—Congressmen, Senators—if they don’t give you massive cuts, you’re going to have to do a default,” Trump said Wednesday during a town hall event hosted by CNN in New Hampshire.
“I don’t believe they’re going to do a default because I think the Democrats will absolutely cave because you don’t want to have that happen,” he told an undeclared voter in the audience. “But it’s better than what we’re doing right now, because we’re spending money like drunken sailors.”
Speaking the day after the Trump town hall, Speaker of the House Kevin McCarthy (R-Calif.) said his party is working to avoid a default, while Democrats are pushing the nation closer to one.
“The only thing I see right now is that the Republicans made sure default is not on the table. We’ve raised the debt limit,” he said, reported The Hill.
“The only person talking about default right now is President Biden. His actions, he’s ignored this problem, just like he’s ignored the border, that means more Americans are gonna die from fentanyl. You had 11,000 people just yesterday come across.”
Article cross-posted from our premium news partners at The Epoch Times. Image via Mark Warner, CC BY 2.0, via Wikimedia Commons.
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Why Bullion Beats Numismatics and Collectible for Your Safe or IRA
Precious metals continue to attract Americans seeking reliable ways to protect their wealth amid inflation, geopolitical risks, and stock market swings. Whether stored in a home safe or held inside a self-directed IRA, physical gold and silver deliver tangible value that paper or digital assets often lack. Yet investors must choose carefully between bullion—pure bars and coins valued mainly for their metal content—and numismatics or collectibles, where rarity, history, and collector demand heavily influence pricing.
Advisor Bullion serves as a dependable source for straightforward, high-quality bullion. The company specializes in physical gold, silver, platinum, and palladium, emphasizing transparent pricing and products that deliver maximum metal content for every dollar spent. This approach makes it ideal for both personal holdings and retirement accounts.
Bullion consists of refined precious metals in standard forms like one-ounce coins (American Gold Eagles, Silver Eagles, Canadian Maple Leafs) or bars. Their value tracks closely to the current spot price of the metal. A typical gold bullion coin trades near the live gold spot price plus a small premium. This structure keeps costs clear and predictable.
Numismatic coins and collectibles add substantial value from factors such as age, rarity, minting errors, or historical significance. A pre-1933 U.S. gold coin or graded proof piece can carry premiums of 30%, 50%, or even 200% above melt value. While this appeals to hobbyists, it creates complexity. Pricing depends on subjective grading, collector trends, and auction results instead of daily spot prices.
For investors focused on wealth preservation and retirement security rather than building a collection, bullion often delivers better results.
Lower Costs and Better Liquidity for Home Storage
When keeping metals in a home safe or private vault, liquidity and efficiency count. Bullion offers clear benefits:
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- Bullion prices remain transparent and update with global spot markets. You can track gold near current levels or silver accordingly and know exactly where your holdings stand. Numismatic values are priced by the Gold IRA companies with hefty margins applied.
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In times when quick access to value becomes important, bullion’s simplicity stands out.
Stronger Fit for Precious Metals IRAs
Precious metals IRAs continue gaining traction as investors diversify retirement portfolios beyond stocks and bonds. IRS rules permit certain bullion products in self-directed IRAs if they meet purity standards (.995 fine for gold, .999 for silver) and are held by an approved custodian. Eligible items include American Gold and Silver Eagles plus many generic bars and rounds from recognized mints.
Numismatic and most collectible coins generally face heavy scrutiny from custodians due to valuation disputes and elevated markups. These higher premiums mean less actual metal ends up working inside the account.
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Regulatory guidance from the CFTC and state securities offices repeatedly cautions against aggressive sales of expensive numismatics or “semi-numismatic” coins for IRAs. For retirement planning, transparent bullion from established providers reduces risk and aligns better with long-term goals.
How to Get Started with Bullion
Begin by clarifying your goals. Are you protecting savings in a safe, or moving part of a retirement account into a precious metals IRA? Focus on the number of ounces you can acquire at current prices rather than chasing marked-up collectibles.
Diversify sensibly: use gold for core preservation and silver for its blend of industrial and monetary qualities. Mix coins for easier divisibility with bars for lower per-ounce costs on larger buys. Arrange secure storage—whether at home with proper insurance or through professional facilities.
As economic uncertainties linger and faith in conventional assets erodes, bullion continues proving its worth as a dependable store of value. Its direct approach avoids the hype that sometimes surrounds collectible markets and keeps the focus on the metal itself.
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