Global Debt Reaches Historic High as Trump Threatens New Tariffs

Once again, geopolitics takes center stage. Donald Trump and China, who else? And a ceasefire in Gaza. On top of all this, we must add the issue of rising global public debt, falling purchasing power, the loss of value of major currencies, the potential collapse of France, and the rise in the prices of gold and silver to new record levels, and we get a weekly overview.

Industrial production decreased worldwide in September due to slowing economic activity in the U.S., weakening demand in China, and the ongoing U.S. trade war. Global crises, culminating in the rapidly rising public debt of the U.S., are leading towards a world “very similar” to that before World War II, according to investor and economic historian Ray Dalio. The American debt bomb threatens the entire monetary system. U.S. public debt is rising too quickly and has already reached 99 percent of GDP and is expected to exceed 116 percent by 2034, becoming a record high in American history. Rising debts are only part of the problem. The situation is exacerbated by increasing global conflicts and wealth inequality. The U.S. and other countries are heading towards civil war with irreconcilable differences, Dalio emphasizes.

Silver Follows Gold’s Rise

At the end of last week, China imposed stricter export controls on everything containing a certain level of rare metals and elements in goods. Specifically, under the new rule, global companies selling goods that contain trace elements from China (seemingly 0.1 percent or more of the product’s value) will need approval from Beijing. This rule will certainly raise additional tensions in the U.S.-China trade war and significantly impact supply chains. A headache for all procurement directors. The first industries to be affected will be automotive, solar panels, and chip manufacturing equipment and other products. China produces about 90 percent of rare elements in the world, and rare earth minerals are the “trump card” that China holds over the West.

Trump’s response is the introduction of an additional 100 percent tariff on China starting November 1, as well as restrictions on the export of all strategic software to China. The only hope left is the anticipated meeting between Trump and Xi, which could push the relations of the two countries towards a better future. Trump already softened his rhetoric towards China a bit on Sunday. We will see what happens during the week. This week, there will be no significant announcements as government institutions in the U.S. are not operating until further notice due to the failure to reach a budget agreement.

Central banks have crossed a symbolic threshold: for the first time in nearly three decades, their combined gold reserves exceed their holdings in U.S. Treasury bonds. This shift highlights a gradual diversification from dollar-denominated securities to tangible assets. Gold broke the record of $4,000/oz last week, driven by expectations of further interest rate cuts by the FED later this month and persistent demand for safe assets due to the current geopolitical situation. Goldman Sachs estimates the price of gold at $4,900/oz by the end of 2026. If this estimate proves accurate, fiat money will lose an additional 20 percent of its purchasing power.

Silver has outperformed the record growth of gold prices this year and could further surpass it. With a rise of 66 percent in 2025, silver has already far outpaced the growth of gold prices at 52 percent. The silver market has recorded a structural deficit for the fifth consecutive year since 2021, with global demand exceeding supply. Industrial use of silver is sharply increasing, driven by electric vehicles, artificial intelligence, and green technologies. Demand for industrial production is primarily driven by China, thanks to its massive manufacturing base and leadership in key sectors such as electronics, solar panels, and electric vehicles. Silver is a crucial component for weapon production.

Energy Prices Fall

On global markets, oil prices fell again last week, the second consecutive week, by about 3 percent, due to the escalation of the trade war between the U.S. and China, OPEC’s announcement of increased production, and the ceasefire in Gaza. Thus, the futures price of WTI oil fell below $60/bbl, and Brent below $65/bbl. These are their lowest levels since May. The escalation of the trade war between the U.S. and China could slow global economic growth, and thus demand for energy. Additionally, oil prices have slipped due to easing tensions in the Middle East. Representatives of Hamas and Israel signed a ceasefire agreement on Thursday, under which Hamas would release hostages it has held captive for more than two years, while Israeli armed forces would withdraw from Gaza and allow the entry of humanitarian aid convoys. The cessation of hostilities could mark the beginning of normalizing traffic, and thus the passage of tankers through the Red Sea and the Suez Canal. Furthermore, OPEC+ allies recently decided to increase production by 137,000 barrels per day in November, as well as in October.

Futures prices of European natural gas TTF fell below €32/MWh as ample supplies offset rising demand expectations. Storage levels across the EU remain healthy at 82.9 percent of capacity, alleviating fears of winter supply. However, colder weather forecasts for mid-October, with temperatures in France and Germany around 2°C below seasonal norms, are expected to increase heating needs. At the same time, the largest wave of Russian attacks on Ukrainian gas infrastructure since the beginning of the war has raised concerns about potential supply disruptions and increased European exports to Ukraine this winter.

Russia has destroyed 60 percent of Ukrainian gas production. This occurred after attacks in the Kharkiv and Poltava regions, according to Bloomberg sources. It is believed that this will force Kyiv to spend €1.9 billion by the end of March to import 4.4 billion cubic meters of gas, equivalent to about 20 percent of their annual consumption. Kyiv has already requested financial support from its partners to cover gas costs and urgently secure equipment for repairing the electrical grid, which is estimated to cost around €758 million. Looking ahead, global LNG liquefaction capacity is expected to increase by 60 percent by 2030, half of which will come from the U.S., raising concerns about oversupply. Traders expect demand to lag, putting pressure on lower prices in both Asia and Europe.

Copper Recovers Losses

Where does the world’s natural gas come from? Several production regions dominate global supply, shaping not only markets but also geopolitical strategy, with nine countries together accounting for about 70 percent of total world natural gas production. The leaders are the U.S., followed by Russia, Iran, China, Canada, Qatar, Australia, Saudi Arabia, and Norway. For comparison, the U.S. produces ten times more natural gas than Norway. In the U.S., a significant portion of natural gas comes from shale, and this transformation and investment in infrastructure have turned the U.S. into an energy powerhouse and a global LNG exporter. Meanwhile, Russia and Qatar maintain significant influence over pipelines and LNG trade routes, while Iran, China, and Canada are expanding their roles through domestic development and international partnerships. Natural gas markets are now at the center of the energy transition, balancing the dual global challenge of energy security and decarbonization.

In the agricultural world currently without orientation, the market is indecisive. With institutions closing and data not being published, both bulls and bears in the market have run out of ammunition and are groping in the dark. However, generally, the current market has two main factors affecting it: (1) the U.S. dollar and (2) pressure from the corn and soybean harvest in the U.S., but also generally in the Northern Hemisphere, as well as a lack of Chinese demand for U.S. agricultural products. It is estimated that the sunflower crop in Ukraine will amount to 11.4 million tons, which is 0.6 million tons less than the previous projection. This is the lowest level in 10 years. Regarding the EU and crop estimates, wheat is currently estimated at 136.4 million tons, 20 percent more than in 2024; corn at 56.4 million tons, 4.2 percent less than 12 months ago; barley also at 56.4 million tons, 12.6 percent more than in 2024; and durum wheat at 8.7 million tons, 16 percent more than 12 months ago.

Copper remains at the level of $11,000/t at the start of the new week. The price has risen since the end of last week, recovering some of the losses from Friday after Trump announced that trade relations with China “will be fine,” signaling openness to negotiations and a meeting with Chinese President Xi Jinping later this month. Prior to that, the price of copper had fallen by more than four percent after Trump threatened to impose a 100 percent tariff on Chinese goods, raising fears of an escalation of the trade war that could limit global growth and demand for metals. Meanwhile, supply pressures continued as disruptions in mines in Chile and Indonesia continued to limit production, with Chilean Codelco recording its lowest monthly production in over two decades in August, and production at the Indonesian Grasberg mine remains limited following last month’s deadly accident.