Elon Musk is issuing a stark warning about the U.S. fiscal path — and he says the clock is ticking.
In a Feb. 5 appearance on the Dwarkesh Podcast, Musk argued that America is on course to “go bankrupt as a country” as national debt climbs and interest costs grow harder to manage.
“We are 1,000% going to go bankrupt as a country and fail as a country, without AI and robots,” he said (1). “Nothing else will solve the national debt.”
The Treasury Department puts U.S. national debt at $38.56 trillion, and it continues to rise as federal spending outpaces revenue (2). So far in fiscal year 2026, the government has already spent about $602 billion more than it has collected (3).
Musk’s core claim is that without a major productivity step-change — driven by artificial intelligence and robotics — the debt trajectory becomes increasingly dangerous. He also emphasized how much strain is already coming from debt service.
“The interest payments on national debt exceed the military budget, which is a trillion dollars. So we have over a trillion dollars just in interest payments,” he said.
Those costs may keep climbing. The Committee for a Responsible Federal Budget projects interest payments will surpass $1.5 trillion in 2032 and reach $1.8 trillion by 2035 (4).
Musk isn’t alone in sounding the alarm. Ray Dalio, founder of Bridgewater Associates, has repeatedly warned about a potential “debt death spiral,” where the government borrows to cover interest — creating a feedback loop that can worsen over time.
Dalio, however, doesn’t expect a traditional bankruptcy-style outcome.
“There won’t be a default — the central bank will come in and we’ll print the money and buy it,” he said. “And that’s where there’s the depreciation of money.”
In plain terms: the government may be able to keep paying bills in nominal dollars, but the purchasing power of those dollars could erode — a scenario that hits savers and fixed-income earners hardest. Musk has previously echoed this concern, warning that if trends persist, “the dollar’s going to be worth nothing.”
Inflation’s long arc shows how purchasing power can fade. The Federal Reserve Bank of Minneapolis estimates that $100 in 2025 has the same purchasing power as $12.06 did in 1970 (5).
So what can individual investors do if they’re worried about debt, inflation, and currency depreciation? Historically, the answer has been diversification — and owning assets that can behave differently when traditional portfolios struggle.
Gold’s role as a shock absorber
Dalio has often pointed to gold as a useful portfolio diversifier, especially during periods of monetary stress.
“People don’t have, typically, an adequate amount of gold in their portfolio,” he said. “When bad times come, gold is a very effective diversifier.”
Gold’s appeal is simple: it can’t be printed like fiat currency, and it isn’t tied to any single country’s balance sheet. In risk-off environments — economic uncertainty, geopolitical stress, inflation fears — gold often draws demand.
Despite a recent pullback, gold prices have climbed more than 70% over the past 12 months.
Some prominent voices argue the upside could extend further. JPMorgan CEO Jamie Dimon recently said gold can “easily” rise to $10,000 an ounce.
One way to gain exposure to gold while seeking tax advantages is through a gold IRA, such as one offered through Priority Gold.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, combining the tax advantages of an IRA with the diversification benefits of gold.
When you make a qualifying purchase with Priority Gold, you can receive up to $10,000 in precious metals for free.
Real estate as an inflation-linked income stream
Real estate is another classic inflation hedge because rents and property values often rise alongside broader price levels — though outcomes vary by market, financing costs, and local supply/demand.
Over the past ten years, the S&P Cotality Case-Shiller U.S. National Home Price NSA Index has jumped by more than 87% (6).
The challenge: high home prices and elevated mortgage rates can make buying difficult, and direct ownership comes with time, maintenance, and tenant management.
For investors who want exposure without becoming a hands-on landlord, fractional and crowdfunding-style platforms have become a common route.
Arrived, backed by investors including Jeff Bezos, lets users invest in shares of rental homes with as little as $100 — with the platform handling property operations.
Mogul is another option offering fractional ownership in rental properties, pitching monthly rental income and potential appreciation without a large down payment or hands-on management. You can sign up for an account and then browse available properties here.
Alternative assets and why some investors look beyond stocks
Diversification matters more when markets become concentrated. Today, nearly 40% of the S&P 500’s weight sits in its ten largest stocks, and the index’s CAPE ratio is near levels not seen since the dot-com era.
That’s one reason some investors consider “alternatives” — assets that may not move in lockstep with public equities. These can include real estate, precious metals, private equity, and collectibles.
One niche category often cited is post-war and contemporary art, which some analyses suggest has shown low correlation to the S&P 500 over long periods.
Platforms such as Masterworks allow individuals to buy shares in artworks by artists like Pablo Picasso, Jean-Michel Basquiat and Banksy. Investors can browse available offerings, choose shares, and the platform handles administration. New offerings have sold out in minutes, but you can skip their waitlist here.
