US Economy Faces Reality Check Amid High Debt, Inflation

The US economy is facing a reality check due to its high public debt and the inflationary impact of the Iran war. The imposition of 50% tariffs on Canada has added to the uncertainty in North America's interlocking economies.

The collapse of trade talks with Canada and the resulting retaliatory tariffs have pushed up bond yields, which determine the cost of servicing the US government's large debt pile. This, combined with the rising prices of oil and food due to the Iran war and El Niño, has increased inflationary pressure on the US economy.

US Treasury Secretary Scott Bessent claims to have a 'big toolkit' to bring down yields, but investors are unconvinced. The government's intervention in the bond markets through buyback operations has failed to calm nerves, and yields have risen again. This has led to a sharp increase in gold, silver, and cryptocurrency prices.