A Reckoning Without Borders

A great deal has been written about America's debt, America's valuations, and the idea that our markets badly need a major reset. Most of it is fair. What gets lost is that almost none of it is unique to us. Walk the ledgers of Japan, France, Britain, Italy, China — the same arithmetic shows up, often in worse shape. The monetary system built after 1971, when the last formal link to gold was cut, is being asked to carry debt loads it was never designed to hold. That strain is showing up everywhere at once.

This matters for a practical reason. When commentators describe a "reset," they often imagine a single American event — one bad year, one correction, one painful repricing, after which things normalize. But if the underlying condition is global, there is no healthy economy standing off to the side to pull the rest back to normal. There is no obvious place to run. For anyone near or in retirement, that reframes the question entirely: the goal is not to predict the moment, but to be positioned so that the moment does not dictate your retirement.

Start at home, because the numbers are familiar

The federal debt now sits near $39 trillion and climbs by roughly $8 billion a day. The more telling figure is interest. Annual interest on the debt has crossed $1 trillion — more than the country spends on national defense — and the Congressional Budget Office projects this year's deficit near $1.9 trillion. Ray Dalio's phrase for this dynamic, a "debt death spiral," describes the moment a borrower has to issue new debt simply to pay interest on the old. The United States is not there yet, but the trajectory is no longer abstract.

Valuations sit at the other end of the same problem. The cyclically adjusted price-to-earnings ratio — the Shiller CAPE — is near 42, more than twice its long-run average and a level seen only once before, at the very top of the dot-com bubble in late 1999. The Buffett Indicator, which compares the total value of U.S. stocks to the size of the economy, recently set an all-time record above 235%. High prices are not, by themselves, a forecast. But they are the single best long-term predictor of disappointing future returns — and the thinnest possible cushion for anyone who cannot afford a bad first five years.

That is the American case for a reset, and it is real. The point of this piece is what comes next.

Now look at everyone else's books

The instinct is to treat America as the outlier — the uniquely reckless borrower. The data says otherwise. Total global debt reached a record $348 trillion at the end of 2025, having added nearly $29 trillion in a single year, the fastest build-up since the pandemic. Roughly two-thirds of that increase came from the developed world. The condition is shared. The details differ by country, but the pattern does not.

Government debt as a share of the economy

No country in this table is in good shape by historical standards. The United States, so often singled out, sits in the middle of the pack — not because its position is sound, but because so much of the developed world has drifted into the same territory.

*Approximate gross general-government debt-to-GDP, drawn from IMF, IIF and national sources; figures are rounded and move with each new budget. They are meant to show relative scale, not precision to the decimal.

These markets are not separate rooms

It would be easier if each country's troubles stayed inside its own borders. They do not. When Japanese bond yields jumped in January, U.S. Treasury yields moved within hours — because capital that had been borrowed cheaply in yen and parked around the world has to be unwound when Japanese rates rise. When France or Britain wobble, the nervousness spreads to bonds in countries with healthier books, simply because investors start asking the same uncomfortable questions everywhere.

Underneath it all sits the dollar-based system itself. Since 1971, the world has run on currencies backed by nothing but the credibility of the governments that issue them. That arrangement works as long as confidence holds. The strain now visible in Tokyo, Paris, London and Washington is, at bottom, a slow test of that confidence — running in every major capital at the same time. A reset, if it comes, is less likely to be one dramatic American crash than a gradual, global repricing of what these promises are really worth.

Watch what the patient money is doing

You do not have to take a forecaster's word for any of this. It is often more useful to watch where careful, long-horizon investors are actually putting their capital — and right now several of them are moving in the same direction.

• Jim Rogers has sold all of his U.S. stocks, calling the United States the largest debtor nation in history and saying he is holding cash and hard assets while he waits.
• Berkshire Hathaway is sitting on a record cash and Treasury-bill position near $397 billion — roughly triple its 2019 peak — after selling more stock than it bought for some fourteen straight quarters.
• Central banks have been buying gold at an extraordinary pace, pushing the metal to a peak above $5,400 an ounce in 2026 — a deliberate move to hold reserves that sit outside any other government's reach.
• Ray Dalio describes the world as in the "late stages of a major debt cycle," arguing the next crisis is more likely to come from governments than from banks.

None of these are predictions of a date. They are positioning. The common thread is a preference for liquidity, real assets, and optionality over crowded, richly priced bets — exactly the posture you would expect from people who have lived through more than one repricing and intend to be buyers when others are forced sellers.

You don't need a forecast. You need a plan that survives one

For someone thirty years from retirement, a global repricing is an opportunity — time heals almost everything. For someone five years on either side of their last paycheck, the same event is a different animal entirely. Two risks deserve particular attention in a world like this one.

Sequence risk. A steep decline in the first few years of retirement, while you are also drawing income, can do permanent damage that an identical decline a decade later would not. The order in which returns arrive matters enormously once withdrawals begin. When valuations are this stretched and the stress is this widespread, the odds of a poorly-timed sequence are simply higher than usual.

Concentration risk. A handful of very large technology companies now account for an outsized share of the major U.S. indexes. An investor who believes they own a broadly diversified portfolio may, in practice, own a concentrated bet on a single richly-valued theme. In a global repricing, that is precisely the kind of position that compresses the fastest.

The response to all of this is not panic, and it is not a prediction. It is preparation: understanding what you actually own, knowing where your income will come from in a weak first five years, and building a plan that does not depend on the next decade looking like the last one. That is survivable investing — and it is the work I do with the families I serve.